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Lecture 12 2 voomater A,B A Likes te wath fecbbadl ia the Living voor 6 hates il the Lista rome vp blocked by folbell DS Us aelady ) i Uge xgrlaly-y, ) Z goods: hours of foOtball in dhe Lisi, rem ¥ tmoney XK. Inbal endowments: Sys Rr 0 > kr20 A Nev native Analysis | Dicderioe opine Mg, fe © WS AWE with an intepjor x, implies woo -1 D mS K wo = Slope ot the price vector ADrormalize px! 2 2D 10 4 Ry 10 = a A x= £0 Observation. Since A hos alloly and Some x initially = We always end up in an interior solutier for A he Te 2% aW att => Yh — Tdianaver te: ho laderer eqvilibey— D> yr? e MRS, ) \ Es eye ree Vo-y > Hoe, 10 = p, WO-%) = ry !-ty) 0 =9,10- FB - lo RT 19 tiae- 0 Oe Bear | yt Ue we SV > 90 back fo begi-rig of Anis course Why world the follows vet work? "IE Hility tromsfus ave allowed” Pols) Max sum of Ailities wilhorl trains fer Max bn i : Lnly\r UnlO-y ) - Fe 2D bt gdb in @ comer delutren- Toc: I whal gre vereng® Cwhy can't we ut say wets, t974p?) 2) Bargaining Cake torent eta) ot to the PO allocation > WE sets us te the FO alle aR wep then #,>4a) 5 | |

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