assume there are two consumers (A and B) in an economy that have preferences that can be represented as cobb-douglas utility functions

Subject:EconomicsPrice: Bought3

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assume there are two consumers (A and B) in an economy that have preferences that can be represented as cobb-douglas utility functions. also assume that there are two firms that have concave production possibility frontiers over goods x and y.

 

which of the following conditions must be true for an allocation to be a competitive equilibrium? select all that apply.

 

1. all consumers must have marginal rates of substitution that are equal.
2. consumers must value goods at the margin at the same rate it costs society to produce them.
3. all producers must have marginal rates of transformation that are equal.
4. all goods in the economy are consumed
5. producers must be operating on their production possibilities frontier.