Determine how many apples and bananas to buy or sell, Macroeconomics

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Determine how many apples and bananas to buy or sell

Assume Jerry and Tom can buy or sell the apples at price Pa and the bananas at price Pb. Both are price-takers. Given these prices, they seek to maximize utility by choosing determine how many apples and bananas to buy or sell.

Jerry utility U_j (Aj_,Bj₎= log Aj + logBj

s.t. P_a(Aj) + P_b (Bj) = 9 P_a + 15 P_b

Tom's utility U_t (A_t,B_t)= log A_t + logB_t

s.t. P_a(A_t) + P_b (B_t) = 12 P_a + 6 P_b

Calculate how many apples and bananas should Tom and Jerry consume?

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Macroeconomics: Determine how many apples and bananas to buy or sell

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Macroeconomics: Determine how many apples and bananas to buy or sell

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Macroeconomics: Determine how many apples and bananas to buy or sell

Reference No:- TGS0872209

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