Astrids Utility Function Is U(H A, C A)= H a C

question 37

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.

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Definitions:

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A type of innovation that has a moderate impact on existing consumer habits and behavior, requiring some learning or change.

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