Problem Set 2

Question 1

if Ya doesn’t exist in the Utility, would it be in the BC

Answer 1

No it wouldn’t, nor in the lagrangian

Question 2

where to apply walrus’ law

Answer 2

When u solve for equilbrium in one product market, so you can justify the p solves for the other

Question 3

what do we require to rank utility bundles?

Answer 3

WE only need ordinal

Question 4

How do we relate utility to wellbeing?

Answer 4

Saying it is cardinal and interpersonal comparability

Question 5

how does roth present a repugnant market

Answer 5

Roth (2007) presents (i) objectification (of people), (ii) coercion and (iii) slippery slope, as the key characteristics of a repugnant market

Question 6

Reflecting on Roth (2007), is the sale of recreational drugs a ‘repugnant market’?

Answer 6

? One could argue addiction is coercive – are people voluntarily getting addicted to drugs? Once addicted are they able to consent to transactions in the same way? One hears the slippery slope argument frequently in the context of legalizing drugs…some object to legalization of soft drugs because they feel it might lead to the liberalization of harder, more addictive/destructive drugs. But there are also differences – by trading organs we are commercializing people and thus objectifying them; not the case with drugs.