In an economy of two individuals (A & B) and two commodities (X and Y) general equilibrium of exchange is reached when
A. MRTSXY = MRTSYX
B. MRSXY = PX / PY
C. (MRSXY)A = (MRSXY)B
D. MRSXY = PY / PX
Answer:C
In an economy of two individuals (A & B) and two commodities (X and Y) general equilibrium of exchange is reached when
A. MRTSXY = MRTSYX B. MRSXY = PX / PY C. (MRSXY)A = (MRSXY)B D. MRSXY = PY / PX