General Equilibrium

Posted by bhavookb21 on May 04, 2016; 3:30pm
URL: http://discussion-forum.276.s1.nabble.com/General-Equilibrium-tp7600360.html


2 agents, 2 commodities. Utility function is min(x,y) for both the agents.

initial endowment for 1st agent (0,5)  and for 2nd agent (10,0).

1. Is the allocation (3,3) and (7,2) competitive equilibrium and pareto efficient?

2. Is the allocation (10,5) and (0,0) competitive equilibrium and pareto efficient?

3. Assuming the sum of prices is 1, then the price vector is (0,1) , (1,0) , (1/2,1/2) or (1/3,2/3)