COMPETITIVE EQUILIBRIUM AND FIXED-POINT THEOREM II
THE PURPOSE of this note
is to show
Problem Set 6 - Problems from MWG - 15.D.1, 15.D. 2, 15.D.6 and 15.D.8. SOLUTION1
15.D.1. Suppose that the Pareto set of the 2 2 production model does not
coincide with the diagonal of the Edgeworth box.
a) Show that in thi
Problem Set 3 - MWG, pp.96-97 - SOLUTION1
3.C.5. Establish the following two results:
(a) A continuous % is homothetic if and only if it admits a utility function
u (x) that is homogeneous of degree one; i.e., u (x) = u (x)
Problem Set 7 - Problems from MWG - 15.B.2, 15.B.3, 15.D.6 and 15.D.8. SOLUTION1
15.B.2. Consider an Edgeworth box economy in which the consumers have the
Cobb-Douglas utility functions u1 (x11 , x21 ) = x x1 and u2 (x12 ,
Problem Set 5 - Problems in the revenue lecture notes - SOLUTION
Problem 1 Prove the Revenue Theorem. You may quote general results on support functions
and duality in doing so. Be sure to give an explicit argument for show
Problem Set 4 - MWG, pp.98-101 - SOLUTION1
3.E.4. Show that if the consumers preferences % are convex, then h (p, u) is a
convex set. Also show that if u (x) is strictly quasiconcave, then h (p, u) is singlevalued.
Professor Robert Becker
Problem Set 2 - SOLUTION This is a homework assignment based on the class notes and discussion.
The commodity space is R2 . Expected Utility Setup:
V (x1 , x2 ) = pu (x1 ) + (1
p) u (x2 ) .
where p is the pro
Lecture Notes on the Composite
Robert A. Becker
Department of Economics
Bloomington, IN 47405
October 28, 2014
Motivation: Keynes and Hicks
Keynes wrote in The General Theory (1936), Chapter 4 on the Choic