An exchange economy has agents and goods . Agent lexicographically prefers to ; agent 's utility is . Endowments are for and for . The competitive equilibrium price ratio
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An exchange economy has agents and goods . Agent lexicographically prefers to ; agent 's utility is . Endowments are for and for . The competitive equilibrium price ratio
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An exchange economy has agents 1,2 and goods x,y. Agent 1 lexicographically prefers x to y; agent 2 's utility is min {x,y}. Endowments are (0,10) for 1 and (10,0) for 2. The competitive equilibrium price ratio pₓ/p_y (A) can be any positive number (B) is greater than 1 (C) is less than 1 (D) does not exist
Also written as: An exchange economy has agents 1,2 and goods x,y. Agent 1 lexicographically prefers x to y; agent 2 's utility is min {x,y}. Endowments are (0,10) for 1 and (10,0) for 2. The competitive equilibrium price ratio p_x/p_y
General equilibrium and exchange economies has come up 69 times in 7 exams since 2004.
This question is on Existence and non-existence of equilibrium, part of General equilibrium and exchange economies in Microeconomics.
When a competitive equilibrium exists and the preferences that make it fail.
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Question from the DSE 2015 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.