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Consider a Society Consisting of Just a Farmer and a Tailor.The

question 14

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Consider a society consisting of just a farmer and a tailor.The farmer has 30 units of food but no clothing.The tailor has 60 units of clothing but no food.Suppose each has the utility function U = F1/3C2/3If the price of clothing is always $1,and the food price is currently $1,then we can conclude


Definitions:

Markup Percent

The proportion added onto the purchase price of products to account for overhead costs and gain a profit.

Cost

The amount of money required to purchase something or the expenditure incurred to produce something.

Markup Percent

The percentage by which the cost of a product is increased to determine its selling price.

Cost

The amount of money required to purchase something or the expense associated with creating a product or service.

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