Re: ISI INTERVIEW PREP

Posted by deepak on Jul 04, 2012; 7:21pm
URL: http://discussion-forum.276.s1.nabble.com/ISI-INTERVIEW-PREP-tp7578819p7579056.html

Guys, I'm not sure about option a. The utility derived from the 2 goods is complementary and much as possible, they'd like to have more of both than more of just one. So if agent 1 had an endowment of (2,5) (which leaves him with an income 7 and a utility of 2), for equal prices of x and y, why woud he trade away from a position of higher utility to (6,1)?