Multiple Choice
Astrids utility function is U(H A, C A) = H A C A.Birgers utility function is min{H B, C B}.If Astrids initial endowment is no cheese and 11 units of herring and if Birgers initial endowments are 4 units of cheese and no herring, then where p is a competitive equilibrium price of herring and cheese is the numeraire, it must be that demand equals supply in the herring market.This implies that
A) 4/(p + 1) + 6 = 12.
B) 4/12 = p.
C) 412/4 = p.
D) 4/p + 12/2p = 12.
E) min{12, 4} = p.
Correct Answer:

Verified
Correct Answer:
Verified
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