Suppose we are given three goods, X,Y , and Z. They are not homogeneous, but come in different qualities, x ∈ X , y ∈ Y and z ∈ Z. Goods X and Y are used for the sole purpose of producing good Z, which we are interested in. To obtain one piece of good Z, one has to assemble one piece of good X and one piece of good Y . More precisely, one can obtain a piece of quality z by assembling one piece ...
