"The Army pays soldiers a salary of $2000 per month. Suppose that all soldiers have the same utility function U=HY, where H is the quantity of housing services demanded per month (i.e., the number of square feet of space) and Y is a composite of all other goods. The price of housing is PH and the price of Y is PY. The Marshallian demand functions are H*=I/2PH and Y*=I/2PY. Soldiers have no income other than their Army salary.
Suppose that the Army abolishes the housing allowance in part c. What salary would be required for the soldiers to be as well off as with the allowance?