Teresa and Jean-Pierre Both Consume the Same Goods in a Pure

question 70

Multiple Choice

Teresa and Jean-Pierre both consume the same goods in a pure exchange economy.Teresa is originally endowed with 9 units of good 1 and 6 units of good 2.Jean-Pierre is originally endowed with 91 units of good 1 and 14 units of good 2.They both have the utility function U(x₁, x₂) = x^1/3₁x^2/3₂.If we let good 1 be the numeraire, so that p₁ = $1, then what will be the equilibrium price of good 2?

• A)$10
• B)$20
• C)$2
• D)$1
• E)$5

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Discrimination

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