Solution of problem 11 (found by Ec 1 student at Brown)

At the end of the day the fishers sell fish, the bakery workers are then paid and profits are distributed. The bakery must hold enough money to buy 6 gallons of milk first thing in the morning, and 13 workers have just been paid 20 clams each, so overnight holdings are

260 + Y_h + 6p_m = 520

where Y^h is the income of fishers.

6 farmers produce 7 gallons each, and the bakery buys 6, leaving 36 gals for the workers and the fishers

36 = (1/4)260/p_m + ½Y^h/p_m

So

72p_m = 130 + Y^h

This gives p_m = 5, Y^h = 230

Income of farmers is 210, so they spend 105 on fish, and the bakery workers spend 65, and 17 fishers sell 85 pounds of fish so the price of fish is 2

Fishers spend 115 on bread, and bakery workers spend 130, and farmers spend 105, so 350 clams are spent on 70 pounds of bread and the price of bread is 5.

bakery profit is 230-170=60=350-260-30