This preview shows page 1. Sign up to view the full content.
Unformatted text preview: x 2 /(3 x 1 ). The good x 2 is the numraire good ( p 2 = $1); for simplicity write p 1 as just p . Then males demand for good x 1 is x 1 = m M /2 p and for good x 2 is x 2 = m M /2, where m M refers to the income of males. Similarly, for females, the demand for good x 1 is x 1 = m F /4 p and for good x 2 is x 2 = 3 m F /4, where m F is the income of females. (a) Find the Walras price of x 1 and the Walras allocation for this economy. (b) Check that the Walras allocation you found is Pareto efficient....
View Full
Document
 Summer '07
 Dr.ShomuBanerjee
 Microeconomics

Click to edit the document details