Suppose there are two con

Suppose there are two con

Suppose there are two consumers, A and B.The utility functions of each consumer are given by:U(X,Y) = XYU(X,Y) = X*YTherefore:For consumer A: MU= Y; MU= XFor consumer B: MU= Y; MU= 3XYThe initial endowments are:A: X = 6; Y = 7B: X = 14; Y = 13a) (40 points) Suppose the price of Y, P= 1. Calculate the price of X, Pthat will lead to a competitive equilibrium.b) (16 points) How much of each good does each consumer demand in equilibrium?Consumer A?s Demand for X:Consumer A?s Demand for YConsumer B?s demand for XConsumer B?s demand for Yc) (8 points) What is the marginal rate of substitution for consumer A at the competitive equilibrium?

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