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(Solved): 3. Xavier And Yvette Are The Only Two Persons On A Desert Island. There Are Only Two Goods, Nuts And ...


3. Xavier and Yvette are the only two persons on a desert island. There are only two goods, nuts and berries. Xaviers utilit
3. Xavier and Yvette are the only two persons on a desert island. There are only two goods, nuts and berries. Xavier's utility function is U (N,,B) = N2B, Yvette's utility functions is U(Ny, B) = 2, + B. Xavier is endowed with 5 units of berries and 13 units of nuts. Yvette is endowed with 6 units of berries and 8 units of nuts. In a competitive equilibrium of this economy, how many units of berries does Xavier consume? What is the relative) equilibrium price (i.e., what is the rate at which berries are exchanged for nuts)?

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