micro DSE 2005 Q.3

Posted by nidhi on Jun 21, 2009; 5:57am
URL: http://discussion-forum.276.s1.nabble.com/micro-DSE-2005-Q-3-tp3127579.html

consider a competitive exchange economy with 2 agents( 1 and 20 and 2 goods (Xand Y)
endowments of agent 1 and2 are (100,100) and (50,0) respectively.  an allocation for agent i is denoted by (xi, yi) where xi is his allocation of X and yi is his allocation of Y. agent 1's objective is to choose(x1,y1) to max is U min (x1.y1) agent2's objective is to choose (x2,y2) to maximise his u= x2+y2

Q3. an example of a pair of competitive equilib prices(p1,p2) for this economy is
a) (1,0)
b) (0,1)
c) (1/3,2/3)
d) (2/3,1/3)

u have given the answer as c)(1/3, 2/3)
 option d) i can eliminate because there is excess supply of good x at these prices
please explain how do we solve for the prices.