Astrid's Utility Function Is U(H_A, C_A) = H_AC_A

question 67

Multiple Choice

Astrid's utility function is U(H_A, C_A) = H_AC_A. Birger's utility function is min{H_B, C_B}. If Astrid's initial endowment is no cheese and 13 units of herring and if Birger's initial endowments are 8 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

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