Unformatted text preview: x i-l F ( x 1 ,...,x n ,l ) = 0 Government has to ﬁnance its purchase g = ( g 1 ,...,g n ) using linear taxes τ i n X i =1 p i g i = n X i =1 p i τ i c i (2) Let’s take government purchase as given. A Competitive Equilibrium is • Consumers and producers allocations: ( c,x,l ) • prices: p = ( p 1 ,...,p n ) • policy: π = ( τ 1 ,...,τ n ) such that 1. Given policy π and prices p , ( c,l ) solve consumers problem. 2. Given prices, p , ( x,l ) solves producers problem. 3...
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This note was uploaded on 12/10/2011 for the course MAT 121 taught by Professor Wong during the Fall '10 term at SUNY Stony Brook.
- Fall '10