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Business, 18.02.2020 17:20 uniqueesmeraldaangui
Consider the following pure-exchange economy with two consumers and two goods. Consumer 1 has the utility function u1(x11, x21) = log(x11) + log(x21) and the initial endowment vector, (A, 0), where A is a positive number. Consumer 2 has the quasi-linear utility function u2(x12, x22) = x 1−α 12 1 − α + x22 and the initial endowment vector, (0, B), where B is a positive number and α is a parameter of the utility function satisfying α > 2
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