ECON201B 2006 PS4

# ECON201B 2006 PS4 - Economics 201B 2nd Half Spring 2006 Due...

This preview shows pages 1–2. Sign up to view the full content.

Problem Set 4 Economics 201B 2nd Half - Spring 2006 Due Thursday, 20 April in Lecture 1. In this problem, you are asked to prove in detail some of the steps from the Second Welfare Theorem in a production economy. Let ( x ; y ) be a P.O. allocation, let pref- set Y j to produce goods in such a way that strictly positive total consumption is possible. That is, 9 y j 2 Y j such that ! + P j y j >> 0 if 0 2 Y j 8 j and ! >> 0 ). A i = f x 0 i : x 0 i i x i g A = P i A i . Show that A is convex. (b) In the proof, we show that 9 p 6 = 0 s.t. sup p ± ( Y + f ! g ) ² inf p ± A . Show that inf p ± A = P i inf p ± A i . (c) Later in the proof, we establish that p ³ 0 , and that ( p ; x ; y ; T ) is a Walrasian quasi-equilibrium with transfers. That is, x i is in the quasi-demand set for each agent and y j Show that ( p ; x ; y ; T ) is a

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 08/01/2008 for the course ECON 201B taught by Professor Anderson during the Spring '06 term at Berkeley.

### Page1 / 2

ECON201B 2006 PS4 - Economics 201B 2nd Half Spring 2006 Due...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online