Ami Pro - LN050911

Ami Pro - LN050911 - Economics 113 University of...

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Lecture Notes, May 9, 2011 --- Part 1 General Equilibrium in an Economy with unbounded technology sets Delete P.VI (bounded j ). Like all good mathematicians, we're reducing this to the previous case. Under assumptions of No Free Lunch (P.IV(a)) and Irreversibility (P.IV(b)), the attainable output set for the economy and for each firm is still bounded. P.IV. (a) if for some k. y Y and y 0, then y k 0 (b) if . y Y and y 0, then y Y Let firm j's (unbounded) production technology be Y j . Define S j (p) as j's profit maximizing supply in Y j . Define D i (p) as i's demand without restriction to {x| |x| c} and with income M i (p)= . Note that S j (p) and D i (p) p r i j ij j p may not be well defined. Define = Y j {x| |x| c}, substitute for j in chapters 11 - 14. Define (p) Y j Y j S j as j's supply function based on . Y j Theorem 15.3(b): If (p) is attainable, then S j (p) = (p). S j S j Theorem 16.1(b): If M i (p) = , and (p) is attainable, then (p) = D i (p). M i p D D Z(p) = i D i (p) -
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Ami Pro - LN050911 - Economics 113 University of...

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