General Equilibrium - June 17

[komal]

individual 1 will like to sell x to have maximum y , but as economy has y = 2 as endowment maximum that he can have is 2 so rest of his income will in form of x

[anon_econ]

he does not think about the endowment. he just goes to the market and demands a bundle.  here his income is 5 and he wants all y. so he demands 5 units of y. they r not available.

[AJ]

Please someone comment about my answer of pareto efficient allocations. Is it like very wrong or is making some sense.. ???

[anon_econ]

dimag nai chal raha anshu. kal dekhungi :P

[AJ]

lol! :D okay! :D
I hope amit sir comes soon!

[komal]

hmm. u r right, thanks

[Amit Goyal]

Hi AJ,

The characteristics of any Pareto efficient allocation is that it must satisfy the following two conditions:
Condition 1: If for some individual i consumption of x is positive then for any individual j > i consumption of y must be zero (since they value x more than individual i do and if they are already consuming no y, so no possibility of mutually beneficial trade between them) and
Condition 2: If for some individual i consumption of y is positive then for any individual j < i consumption of x must be zero (since they value y more than i).
Basically, feasible allocations of the type:
((0, y(1)), (0, y(2)), ...., (0, y(i - 1)), (x(i), y(i)), (x(i + 1), 0), ...., (x(N), 0))

[AJ]

Ohkay... thanks sir.. but I meant a bit same thing.. I know what I wrote was too confusing. :p

[anon_econ]

Thanks sir!

[tim]

hello amit  sir...cn u pls temme frm whr cn i do gen eqm ..bcos i hv problem finding competitive eqm n pareto efficient allocation...pls help me..i m nt ur student...but it wud b grt if u cud lep...

thnk u

[Amit Goyal]

If it is the problems you seek, there are plenty that are discussed here. And if you are looking for the textbook to explain the concepts, then you may refer any good textbook in Microeconomic Theory. Some of them are:
Intermediate Micro Economics by H. Varian
Microeconomic Analysis by H. Varian
Advanced Microeconomic theory by Jehle and Reny
Microeconomic Theory by Mascollel, Whinston and Green
Pick any. The first one is elementary, the rest are little advanced.

[tim]

thnk u for replying sir :)

i ve read the text book..intermdeiate hal varian...its the questn that i face problem wid...i m nt able to actually find competitive n pareto efficient  alloaction..there some questns in wich both the utility fns r diff..
cn u pls explain this eg. how  do i solve for competitive eqm n pareto alllocation

u= min(x1,x2)    e = (12, 12)
u=x1+x2   e =(18, 18)

iska pareto efficient allocation n competitive kaise find karenge...