(4) Consider an economy with two consumers and two goods. Consumer i = 1 has preferences represented by the utility func

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4 Consider An Economy With Two Consumers And Two Goods Consumer I 1 Has Preferences Represented By The Utility Func 1 (33.85 KiB) Viewed 63 times

(4) Consider an economy with two consumers and two goods. Consumer i = 1 has preferences represented by the utility function (1) = 1. Consumer i = 2 has where tue is the consumption of good 1, 2 of consumer i preferences represented by the utility function uz (221, 222) = x31232 (2) Each consumer i = 1, 2 is endowed with wi= (Wit, wi2) units of each goods. 1. Solve for the Walrasian demand functions of each consumer assuming the prices of good l = 1,2 is pe> 0. 2. Let wi = (1/3,1/10) and we = (2/3,9/10). Find an Walrasian equilibrium price vector, P, such that both consumers maximize their utility and the total consumption of each good is less than or equal to the total endowment of each good.