spasation. Demand Fumetitre, Manin ze willy por’ (ai, 20) = ae (0,1) gt M= pat pata (Budget contain) \ ‘ : \ nie | Laatal "4 \(M— bai peta) Ob antag +acpso. —O4 | oes § Pant { OL = (I-w) 1% aa + Alcpa)=0, ee ey 0% (iis? a | a4 \ \ By aL = M- pis pa%a=0 j Di ae oe (3a ee oe (I-0) 41° 22. * 2 SS a + pen Db ye” Ge =i) "x, + ps > (pipe MAM cad ad RO (Mesh) ¥ Me past [\pia, ax Z =} BG M a si aiM= "hams ine Pa Fe sas a | Cae Me pa = aX (I-94 bX pa" A= es oo Pp v( b V(b) /M) = (i-a)M | wal -Meviadton, dens an ai em V(pop.™) = (=) oy lla cA. CC pod atte Me 4 (pr, Pr» ™) ”, : Bh rc y mol Masshallionr » fr lee he peesa eee pe Pe a Wee =o? ee apr : Bae?! pa | - WV ap = Mo ee «7? aM fy todesotaby | dsp cael wi (pop) = a : 9% (_pr,p M1) = 8) 2 NG pi% 7 pate Ot, = 1 . om e obo eee oe Ox = fe § constant eae mE OL _ ; y Margival Rate of3; abel dete pa} feo bt cia a Fake Snr tm wd of mone Fm pled 1 40 png ~du Am + 24 An. An. = oO Ti 0% al 7 Be Cb fig oi Pie ve Aubert Oxo i cite ‘aasample : 4 U[%,,%9)= 20°F” n= 100 sper 2spom4 ’ %, = O:5X100 = 50 = 95 | aaa | Xp = OSXI00 =19.5 4 pre Me purit pam. AM = , Abi y ne (pr fe) Op, bm = 25(6-2) = 100 M'= M+ BM =100+ 100 = 200 ay = O5X1D0 = 8.33 6 8 DO BXIOO\ = 1915, te ; i gtd de gubstduition and tneome get. % \ ' 1 ‘ ‘ ‘ENDOWMENT ECONOMY ~~» Individual ds endowrd with co, of god goed ee. | « 4 geet gy Sudiuidual sells these ercdewmert ean Lncomny M= pie + pr Wo Conse , tre Siivdoluol uses. his menay Deng | fe hay gpol £ good 2 Ab! warn at u(x, ,%2) = xk an; OLad 4 M = pitas + Pate = put Xo Lagrangian: a | L= om + Al peo, + paleo be tei BL = amr tag "+ Aep=2 Oe (i-a) age d(-p2) = © Oh, aL = puatperpar pre?_ ee, ee aes LTT ee ee eT Te es eee epee eT ge or ee Ce ee eee oe wel mM, = ~ > I- aol rr 2 pom = ela pis pits ae ak pnt fies press (lat Pi 2 pie + po, = Lim y > = (byl, + pa‘9s) b, 9 mer pier oon pate 9 [a pt 3 a x (iat)(ps 2, + pas), ' p% oh: = pe + puto, 4 pleco) +pelecal= °Wabtas' Law: Value © , extess dernandl + al) te taken ete guio. 4) u-4 wosikelt ae, sf, Ho dhe nth mockot is automatically in 4, °, § eres demand op ee gook the pd tan cay lanave, Jou pods i ai wel, | ot fas dha pocen fom all monies conned Oe cltemined ot ener sinpisltanemty. “that rary ot - diterpenes ys oie wshoan, pstice Comm 3 a | | | | | | + Gal) — | or ‘ du ele “4 Indirect vaididy Punction ' V (Prapasto, 22) = # (ia) es o- | 5 = A but) (rte) 7 | a hate x Moket ey fo L { x,(p, spas Ws) = x( Chto pas 2) _ p, = abate Sonal “09s : el wb = 02 ‘ peel p eae ieaption of Comptes Wnt papel ppptiidensivont is econ 48% i wean gliocation auch thet, st ynarci val ges inglividual ptilty , ae prope avid atl “monket clean. é & (br 14,%" Ga") = | Aes (oe, yp - Ha) og éy (1,2 500," sea) ( (9,02) Bromple: ule ae [0,, We) = (1512) (pope = C4) 50: Sax : z 05H (HXISTND gp e133, * ta fl H, = 0-9% (uxt + 10410) r 10 pu = p= % 10 =0.67 ; ps . \ pelp, = pe” = beApblication, of the Lleucnacs Economy (Consumhibon, ©, P Ws w= We Oh on [P ee Iq, De lice lee AD tee Masket loosing *inde Economy | 4 Tipey beruad teoochol) us u(e.c) = ¢ oh sD caed lion? fubow conmmplion Govunt covuu mf frolousment | Qwount pe aw enolieaaaen SG 4 (8) 5] Cee Lee inn breek) ntenert Hote 7. Covrenrt | G5 b0 io ae fuboe posice =p oD = (wade Net ° l tie sate = TT ies Gikinaity eee Guus inflation ose ; 4 Qwest pariod Budget hate: res ea ke ( Mauted Budget evince oa A \ 1)" ew, + [ItL\s5 = 6 ; ) } ath Fischer a ira sea) Lttout sate, (ito) = 7PV Budget comebraint PY ies endowment = vay ‘ Cong pe q to + ee Mend, = +t per) Palatine putee Ore oar Optima /Merahelfion demand jurction ye bts C( p,t0,4,) = ra steer) L (p94) = (1-d)m merger) Co) i ae Weatnos’ Law plo- aad p oO “4 2 ae ayn (t-oi)m = ome 4 lg ae aA oo a, pee ain ar z er ca fee) :- utpw'0 -u, tun(I+) =O ee ie A pion wa easvint potied gues u, ai ey (42) uni comuumption -¥ oe ee nrGus u(¢, 1) = cg = OS y (w,T) = (10,24) A 5 uct) = 072? : me Tot vAYy ” = 4op lop +24W = pe + WA = We, pes + 44 a ie m= ID+2hw = perv t i Th= oy? + A (10+ 2h -~c - wl) } Fin] al. os H 4 hs 954 oe 2 108 + Ala e tet oid de ob ah capes ae pe ae ork = habe Ca hws Or. aks oA JO+24W= cre > 9¢ =)0+2hs > C= 10+24 -5+w= 10 9w= 5 2 12Pe ca es * x10, day | [phat et st] Lae oo = (),0-42, "10, 24) Ww » me part WT gusc i m= pe+wa Z= Lh +A (m= pe-Wl) | fo.c a2 Gen ce hee 22 = efi-a) ON" - AW=07 diene ye + pes m f A + 00) io = ce ma, te {Iea) ma eq: t= 00, += a =a jS Wop) (ie #1) o~ | Q Good oth acim: ot 220) lee, m= p WGuscliod meres wma ey £5 ‘ _ Fee tp ee re ae | [ron I+ oC = ac og #-R <0 ¢ \ 02 = to+ QO} 10 = (Gee D p+9t Jhow o Qe = itt \ e tn aq ® Cee % [pot “S oot (50.4) oe= (or B= jo+_5 = 2h 9 ae Sa z [+o 12 phe at Bnet ig [pute G*] = (0-42,1,12, 5) or? ee ins ce = .x( po) = a0 ip x = (i-a)m= i Oke : dp; Ob; Fi : . | " vt j Ox; = Oxi = m5 orn | Pj u / pea Be le, ae i 2 Oh ben(to-c* a : m 4 a = a2 b- Ae re See +(@- at) ae dc ac ety ce: da. re “to ‘e sai a (Vin Tos xowtt told sie ee "Gales, * dogasdtumic procluction pee oe eh Net Sones benef, ABackestes Negetis vapact Net bpvrewers | Positowe wept ee sea dw +(t 7h a 4 ow i 5 a Two ilies soem ae. a'(a %) g aye ae, wah \ u?( (a2, xf) = Me endousmenk 4 pe 1> @,= a MeO a, = + OF. 16 Mm, = pr, oven Ml) Mebale- bea)if moasket Cle axing = (2) )* (mst) + A (me =p%! “fas xi) ou oe a ot 1-a 2s (ome) (ek regs hed © 32 & ae 1-4) (mi "(ad = Apa = 6 Fic Sl oa Ps [=e oy.' Manket clasing implies a) = Or ; ms, en ay Ae pp ANEZE P ’ ‘ 2 (ea) me i, = (Ira) my > fh = See Pe On “i. ee “ B. I-a ae Jos Individual oa aad ‘pl as ¢ I-B wo ! 2. 0, HAY oh th = 0+ OO + x, = ae oe Wee 1 2 gq = Amy = (Ia) pr bee 1 = yt Be ' apa R wed | wit S|, \. ; , = ea), + (fa Be es = (am, + Mo)Wa, ~ ape (0-9 ™, +(I-P)mn) 0,f,-1 and supsttiies m,,7a ,@e uo 1 cot) fy (asl +a ~ 1 ~ 02) = & O putting masishaltianr demand —- of KMS Q combuag budget conatuatints os beth ebuthath? P, = «(PO + ea) + Ch coP+ fy cn) h (l- =x) (peo) + Beast) + 15 Prego 24 p02) Ge p= 2h! + Oda!) +B (h w, + cost) Ce -a) (6,0,' + ad) U0 plh@ tpeomyes oe pin ate (0, Os= 2F=0 pr= Beoo* ’ Gl cf) CPrkde & th \ bec Pageaherspe SS . (ai*= Un —0t) 20)’ f geod A a ee + ee Zz i — ay feat goot vs ee. Pepe. he Soa pan oea 4 % 0, | | | | B(P)= Budget sch ah dvdindduo! ee | 8'(P) = Budget sb 4 drdttdoad 2 o. A> Obdinad post of NN BP optinal point oa Q\ | Bae ’ Rove, Hot A=8 dee: only One ect 4 aS Quel of excess supply ob goed 1Paice adjusts such that Total camand of good 4 = eridousmont of good 4 for botr goods. (00, We) C HK, =, , Xq= CO, A pe ~ a 1-o Vs aM(i-a) 'm *: : , M= P00, + By Ne Colcutate comp. 4 poe ano abloceion . Using Ray’ ddentty, compute marishotlion olemand 10" fee beth. OV. cele THA re a” = #(r-0) 7 Ro? Cure ae ‘ 1 yo \ Se es Cu O41 9 1-4 | f, ea DV anal (ical AEE olin Oe | ee oe,Khao Fi 0 Ee ene P % = ee x Us mein(, aa) ® fir - comb 6p. ah pak bbe shalt y= %) +ddgles) —> quasilincor 2 = a + deglea) + n(n pam pas), 2Z = I> p= io OC aA 2 damand dows ; a 22 = L-np>0 J Change bith lio On, a ‘ a 4 : Mosahaliian oldirand a LoD m= PX, +P2%e IP s1,%, % ae i (0, ey 02)= Oe ether u = (an? b n,') VE pis oe ‘ dei me cha © pe = Pit aX p= (ants bah )/P + A (pico, + pater pr%s~ pars ) oe poe Jigen - _ Apa o ax jue Ss Har? + bat): quan = nice | x ‘ DL = peo, + pan Pi%i~ Pa%n~ 0° ; aA Hise wi Ip _ Xo. f.9 : re, m, = %./ Fb VP ha pio, + team oe Plo, + Reon = tes ahemif = (Parnes) [2 b\P ‘i A \ \ 4 cs +Ao2) (fb) )Fr pe Fraga ie oc eg: ava, ade bl ta - ba+Aa)(b9) it pitty 5 Pet VR pyle, + 0a, Carr tage nM, Yer rele a a, ache Qa + [* tt Rie ee ae(D, + pata = filer pace = 0% eA Ane pot Aten a b ng 14 2 a foi t pate Am* F(x2) aX= pW + , UD, p+ Pr ba) % = pi 0, + fr Ox (%) + Pe 2, = a( pat patos) vane b pts pa“) api + bps ; ap: + & fa Mastkot Cheasting SO) Ste Ne en, pe! co, = (pert pac)- as bp ' a ape, + ota, = ap t0s + om = Qt0g— Bley, CLtdy = be, wea 5 =et Rie + (00; xj IK a an Lie 1 Me os E Het, Susi) ap, + bps op thps M= pil0,+ py Wy : ax, = -a’m amy ” aay ve (ap.+bpa) yen ap bps * Om,Cased potod eccradacetl co Cupet taxation = T Putwte poriod endoumut = Fudrore, pried daxoclion = oH Real inrcdesrert otocle = ot - w-T= e+ gf (iee) = C o(1+t O- Ae ( } to, ¢(o- T= Cir = & (Oe wo-T-¢ - 4 |p }+ > o-T+ Bye c+ [+n [+4 Ire ee -T) - c +o > gies th bods. Goud exp: Gb foe “ out: sells B o- # yg ca dls ue Gr =6+T Newt d exp. = Gy , tax got (et oes,Gye = 7, - BUD — * Ge BGC) > Gy + GCI) = 7 Wttles)) + ge Ea p(@- myo pert, p= pot | pet o, = perGy * fa , A lat ae plera- oo) + [e+ Gy )- 5 2 y= a dog(e) + (I- a) bo (4) Moxie dhe MesukaWion olemond su “¢ and 4: L= Saas ce “Nore w) : ae des= poor = (per) ie (I- rs ea > Ce 2. [peo coy ~ (p+. 4] Alecation fe vs onli on gout: a mot on the ny “tee gos fiverees th a, This ts called Ricarolian Epulwelence- tem git, Chi debut ; Trdividlual eg i ede oa alee pe, ee Grdjiuidual Gh Saves oo dn berds. { he fol ¢ apap eget Oh robe e HTOH - yf i ays r ; 0, Gy = (-a) | poo 4 ca, - pr & J a. aye a 004 = Gry = pli-a)(co» &) 4 boy by 7 [-% @-G rantAlo-&, 4) . « (2, 60)) ey wo- c0-G) ee = ~he + peor — por~ Gy dame trot the one (a IAAI | | Con aS tos BES GT, Oy a aye “a luge budget each awd euare E edutlunls cous Ut ord Han 9 oud duditdual (usoant ported oe yee us babs ot pte 4 ard co + 98b RB bends prone g vob uolousmenct = d e ta the meat pood. oe ave 4 = c+94(e,~%) 3 nee aged Gah, aBend tneome ond dvdenort siode, ant pine seelated , : ; c= a(4 7 a) 4 oe flonnen proklen : Man u(¢,¢y)' $4) W=ct+G ahs Cty : Fd tow feoible allecation. thot rraxioniges while w=C+$ 2 { Stra) (1-2) + Ope Cf p(i-t)oo+ ay = ple tere ployee) pee 2. dz,a ar aaa ear eS NE Cea ocnnS cue Ot as. traction ts Subuoduted on beth Capit! and labour jncome ond the tan sole is T. (wat Re )Ci- 0 = c+ J u T (90+ R= Vo@ sere > Y= C+TtG