Re: DSE Q.NO-34 2010

Posted by vikram on Jun 06, 2012; 11:23am
URL: http://discussion-forum.276.s1.nabble.com/DSE-Q-NO-34-2010-tp6502921p7577495.html

In the same question set, I have a doubt in the previous question where agent 1 lexicographically prefers y to x and agent 2 treats x and y as perfect substitutes, and we need to find the set of competitive equilibrium prices p_x and p_y (both > 0).

Here, the competitive equilibrium allocation should remain the same as initial endowment. Walras law doesn't seem to work. Please help as to where I am going wrong.