Re: DSE-2010 Ques: 31-34

Posted by duck on Jun 12, 2013; 3:13pm
URL: http://discussion-forum.276.s1.nabble.com/DSE-2010-Ques-31-34-tp6501930p7582185.html

Hi Sumit.. :)

For Q34) Agent2's demand is y=2px/px+py and not just 1.
You must have assumed px=1 along with py=1 and then, you got Agent2's demand as one unit of y.
So, be careful.  
Also,there is no problem in assuming one price to be a numeraire price and checking for other price.. :)

And for (px=0 and py>0) ,
Agent1: Max "y" he can afford is 1 at these prices and demand infinite "x" as its freely available.