Multiple Choice
Consider a society consisting of just a farmer and a tailor.The farmer has 10 units of food but no clothing.The tailor has 40 units of clothing but no food.Suppose each has the utility function U = F ∗ C.The price of clothing is always $1.What is the competitive equilibrium price for food?
A) $5
B) $4
C) $3
D) $2
Correct Answer:
Verified
Correct Answer:
Verified
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