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1. Show that (2, 1) is the demand of the consumer for the price system p = (1, 4) and the wealth
w = 6.
2. Determine a price system p0 and a wealth w0 such that (3, 1) is the demande of the consumer for
the price system p0 and the wealth w0 .
Exercise 2. Let L = 2 be the number of commodities. A firm produces the commodity 2 using the
commodity 1 as an input. The production function of the firm is given by
f (y 1 ) = max {0, y 1
1} with y 1 0