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Unformatted text preview: CB046/Starr LN050911pt2 May 6, 2011 10:59 1 Lecture Notes of May 9, 2011 – Part 2: Production with unbounded technology We restate for the technologies Y j the assumptions P.I–P.III on produc- tion technologies introduced in Chapter 11 for the technology sets Y j : (P.I) Y j is convex for each j ∈ F . (P.II) 0 ∈ Y j for each j ∈ F . (P.III) Y j is closed for each j ∈ F . The aggregate technology set is Y = ∑ j ∈ F Y j . Boundedness of the attainable set (P.IV)(a) if y ∈ Y and y negationslash = 0, then y k < 0 for some k (No Free Lunch). (b) if y ∈ Y and y negationslash = 0, then- y negationslash∈ Y (irreversibility). P.IV is not an assumption about the individual firms; it treats the pro- duction sector of the whole economy. r ∈ R N + = vector of total initial resources or endowments. Definition Let y ∈ Y . Then y is said to be attainable if y + r ≥ 0 (the inequality holds co-ordinatewise)....
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This note was uploaded on 11/30/2011 for the course ECON 311 taught by Professor Zambrano during the Fall '08 term at Cal Poly.
- Fall '08