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Suppose Two Individuals in an Exchange Economy Have Identical Utility

Question 11

Multiple Choice

Suppose two individuals in an exchange economy have identical utility functions given by Suppose two individuals in an exchange economy have identical utility functions given by Person A has an endowment of x = 9 y = 8,person B has one of x = 16 y = 2.The price ratio that will prevail in equilibrium is: A) p<sub>x</sub> / p<sub>y</sub>= 2.5. B) p<sub>x</sub> / p<sub>y</sub> = 1.0. C) p<sub>x</sub> / p<sub>y </sub>= 0.4. D) p<sub>x</sub> / p<sub>y</sub> = 0.125.Person A has an endowment of x = 9 y = 8,person B has one of x = 16 y = 2.The price ratio that will prevail in equilibrium is:


A) px / py= 2.5.
B) px / py = 1.0.
C) px / py = 0.4.
D) px / py = 0.125.

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