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(35) We now analyze the general equilibrium of this economy. (a) (5) Normalizing the prices such that p3 + p? = 1, nd the equilibrium
(35) We now analyze the general equilibrium of this economy. (a) (5) Normalizing the prices such that p3 + p?\" = 1, nd the equilibrium rental price of land 7"\". (b) (5) Typically we might normalize by xing pa = 1 or setting pa + pw = 1. Why is it valid here to normalize using a non-linear function? (G) (5) Find the equilibrium prices of corn p: and wheat pit\". (d) (5) Find the equilibrium quantities qg', 9'3): land used 236;), and prot earned 7Q\
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