Re: DSE 2013 Paper Discussion

Posted by kangkan on May 22, 2014; 3:01pm
URL: http://discussion-forum.276.s1.nabble.com/DSE-2013-Paper-Discussion-tp7584703p7590431.html

Hey guys..with regards to the lexicogrpahic questin..i think here are the ans..i think for the 1st one, its is option b..lets assume px=2 and py=4  now the respective endowments are worth 20 and 40...but at these price agent 1 will still demand 10 and agent 2 will still demand 10 too..hence,the excess demand will be zero..by walras law,these prices shud be an equlibrium

Now second..here px=2 and py=4 and the agent will demand 20 units of good x...so excess demand wont be zero in one market...   lets assume prices to px=py=4..then endowments are worth 40 each...they will demand 10 each...so the option shud be d.

@akshay..please help :)