economics

7. Give an example of indifference curves (on the closed first quadrant of the plane) that have well defined tangents everywhere in the open first quadrant (or alternatively the indifference curves are such that the marginal rate of substitution is well defined for any strictly positive vector) such that demand cannot be found by looking for points where an indifference curve is tangent to the budget line (or alternatively where we cannot solve for demand by looking for points where the marginal rate of substitution equals the price ratio). For simplicity, it's enough to show this for an example with an initial endowment vector of (1,1) and a price vector of ( 1/2, 1/2 ). (5 points)