Answer to Question #241497 in Microeconomics for Mehak

Question

Consider a pure exchange economy of two individual A and B and two goods X and Y assume both the individual are endowed with two units of good X and 1 unit of good y each

Let utility function of individual A and B be Ua = min {Xa ,Ya} and Ub =min Xb/4,Yb}where xiand yi for i ={A,B} represent individuals consumption of good X and Y respectively . Determine the aggregate excess demand function for each good

Answer 1

$MRS_A=\frac{Y_A}{X_A}\\MRS_B=\frac{Y_B}{X_B}$