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Question
Suppose two individuals in an exchange economy have identical utility functions given by
Person A has an endowment of x = 9 y = 8, person B has one of x = 16 y = 2. The price ratio that will prevail in equilibrium isa. px / py= 2.5.
b. px/ py= 1.0.
c. px/ py = 0.4.
d. px/ py = 0.125.
Answer
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