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An exchange economy has two consumers, named Jimmy and Sue, and two commodities, apples (A) and bananas (B). Jimmy's initial endowment is 2 units of apples and 4 unit of bananas. Sue's initial endowment is 4 apples and 4 units of bananas. Jimmy's utility function over apples and bananas is . Sue's utility function is of the form , where and are the amounts of apples and bananas for Jimmy and and are amounts of apples and bananas for Sue. Suppose that the price of bananas is 1. Under the competitive equilibrium, how bananas will Jimmy have
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An exchange economy has two consumers, named Jimmy and Sue, and two commodities, apples (A) and bana...
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