Should albert and betty trade

Reference no: EM133711767

Question: Squirrel Albert lives in Canada, where he spends his days searching for nuts. In a typical year, Albert nds 400 nuts during summer and none during winter. His utility function is UA(x1; x2) = p x1 p x2, where x1 denotes nuts consumed in summer and x2 denotes nuts consumed in winter. Squirrel Betty, who lives in Argentina, has the same utility function and also nds 400 nuts in summer and none in winter. Note that, when it is summer in Canada it is winter in Argentina, and vice versa. 1 (a) Assuming that nuts cannot be stored, but can be costlessly shipped between Canada and Argentina at any time of the year, should Albert and Betty trade?

Reference no: EM133711767

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