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Consider an economy with three goods. Suppose that a consumer has a continuous utility function satisfying local nonsatiation. Suppose also that the consumer's Walrasian demands

Consider an economy with three goods. Suppose that a consumer has a continuous utility function satisfying local nonsatiation. Suppose also that the consumer's Walrasian demands for goods 1 and 2 when p3 = 1 satisfy

x1(p1, p2, 1, W) = a1 + b1p1 + c1p2 + d1p1p2

x2(p1, p2, 1, W) = a2 + b2p1 + c2p2 + d2p1p2

(a) State Walras' law and use it to find the Walrasian demand for good 3. (It's fine to just give the demand when p3 = 1.)

(b) State a mathematical result about the homogeneity of Walrasian demands and use it to find the consumer's Walrasian demands at other values of p3.

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