Why the freedmanian economy is not in equilibrium

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Freedmania is a small society that produces and consumes just two goods: tequila and medicine. The price of tequila and medicine are both $1 per unit, but the marginal utility of medicine is greater than the marginal utility of tequila. All consumers have identical Cobb-Douglass preferences. Clearly, the Freedmanian economy is not in equilibrium.

Reference no: EM13209246

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