Re: DSE-2010 Ques: 31-34

Posted by Sumit on Jun 11, 2013; 4:18pm
URL: http://discussion-forum.276.s1.nabble.com/DSE-2010-Ques-31-34-tp6501930p7582147.html

@Duck:Thanks a lot ...You explained it in such a simple manner.

But I have a small doubt in Q34...I able to get my answer correct simply looking the demand and supply for good y. (that is agent-2 to will now demand 1 unit of Y but agent-1 will not supply it) so,there will be excess demand of Y...so, market is not clearing.Therefore, no competitve equilibirum exists...My question is the approach I used here is correct or not????...Actually I asking you this question bcoz I able to get all the answer correct simply assuming Py=1...and then looking which price of X..will clear the market in all the cases...

One more thing...In second last line of your answer---you mentioned For (py=0 and px>0) or (px=0 and py>0), agent1 would demand infinite amounts...
I agree for (py=0 and px>0)...agent1 demand will be infinite for y (coz he is actually getting good y for free) and zero for x...
but for (px=0 and py>0) would not be agent1 demand for x would be infinite and for y=1?????

and Thanks once again...Its mean a lot to me...