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 20 units of herring and if Birger's initial endowments are 9 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) 9/p + 20/2p = 20.
B) 9/20 = p.
C) 20/9 = p.
D) 9/(p + 1) + 10 = 20.
E) min{20, 9) = p.
Correct Answer:

Verified
Correct Answer:
Verified
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