In an exchange economy with agents 1 and 2 and goods and , agent 1 lexicographically prefers good and agent 2 lexicographically prefers good . Endowments are unchanged: 1 has and 2 has . The vector is a competitive equilibrium vector of prices if and only if:
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In an exchange economy with agents 1 and 2 and goods x and y, agent 1 lexicographically prefers good y and agent 2 lexicographically prefers good x. Endowments are unchanged: 1 has (10,0) and 2 has (0,10). The vector (pₓ,p_y) is a competitive equilibrium vector of prices if and only if: (A) pₓ=1=p_y (B) pₓ>0 and p_y>0 (C) pₓ>p_y>0 (D) p_y=pₓ>0
Also written as: In an exchange economy with agents 1 and 2 and goods x and y, agent 1 lexicographically prefers good y and agent 2 lexicographically prefers good x. Endowments are unchanged: 1 has (10,0) and 2 has (0,10). The vector (p_x,p_y) is a competitive equilibrium vector of prices if and only if:
General equilibrium and exchange economies has come up 69 times in 7 exams since 2004.
This question is on Competitive equilibrium in an exchange economy, part of General equilibrium and exchange economies in Microeconomics.
Finding the prices at which every consumer's chosen bundle clears the market.
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