micro-fall2007-18

micro-fall2007-18 - One-Period General Equilibrium...

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Unformatted text preview: One-Period General Equilibrium One-Period General Equilibrium Household A max x A ; y A u A ( x A ; y A ) , s.t. p x x A + p y y A & p x ¯ x A + p y ¯ y A x A ¡ 0, y A ¡ 0. Solution: demand of household A x ¢ A = x A ( p x ; p y ; ¯ x A ; ¯ y A ) = x A ( p x ; p y ) y ¢ A = y A ( p x ; p y ; ¯ x A ; ¯ y A ) = y A ( p x ; p y ) Ani Guerdjikova ECON 313 Fall 2007 178 / 181 One-Period General Equilibrium One-Period General Equilibrium (contd.) Household B max x B ; y B u B ( x B ; y B ) , s.t. p x x B + p y y B & p x ¯ x B + p y ¯ y B x B ¡ 0, y B ¡ 0. Solution: demand of household B x ¢ B = x B ( p x ; p y ; ¯ x B ; ¯ y B ) = x B ( p x ; p y ) y ¢ B = y B ( p x ; p y ; ¯ x B ; ¯ y B ) = y B ( p x ; p y ) Ani Guerdjikova ECON 313 Fall 2007 179 / 181 One-Period General Equilibrium Market equilibrium De&nition A market equilibrium is de&ned as: a system of equilibrium prices & p & x ; p & y ¡ and Ani Guerdjikova ECON 313 Fall 2007 180 / 181 One-Period General Equilibrium...
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This note was uploaded on 04/30/2008 for the course ECON 3130 taught by Professor Masson during the Fall '06 term at Cornell.

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micro-fall2007-18 - One-Period General Equilibrium...

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