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Astrid's Utility Function Is U(HA, CA)= HACA

Question 24

Multiple Choice

Astrid's utility function is U(HA, CA) = HACA.Birger's utility function is min{HB, CB}.If Astrid's initial endowment is no cheese and 3 units of herring and if Birger's initial endowments are 13 units of cheese and no herring, then where p is a competitive equilibrium price of herring and cheese is the numeraire, demand equals supply in the herring market.This implies that


A) 13/3 = p.
B) 3/13 = p.
C) 13/p + 3/2p = 3.
D) 13/(p + 1) + 1.50 = 3.
E) min{3, 13} = p.

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