assumptions topic 1

Question 1

assumptions of topic 1

Answer 1

two individuals A,B
two goods 1,2
A’s consumption bundle
B’s consumption bundle
A’s utility function
B’s utility function
A’s endowment
B’s endowment
Total endowment
Feasible allocations.
Assume individualistic, monotonic preferences. Perfectly efficient markets.
Competitive behaviour

Question 2

What STWE

Answer 2

Assuming convex preferences, any pareto efficient allocation can be made the equilibrium allocation given some equilibrium price ratio and some endowment point.

Question 3

social welfare function

Answer 3

Society has a preference relation over utility pairs due to its criteria. Can be represented by by a social welfare function