VL 02 · Mo, 19. Okt. · 9 Folien
The Classical Market Model
Sets up the general framework for the next four lectures: an economy with L goods, consumers (consumption sets, preferences, endowments, firm shares) and firms (production sets, input/output sign convention). An allocation assigns bundles and production plans; it is feasible if total consumption does not exceed endowment plus net production. Pareto optimality is the (weak) welfare criterion. With linear prices and price-taking agents, a competitive equilibrium requires profit maximisation, utility maximisation subject to the budget, and market clearing.
Economy model: goods, consumers, firms and production setsFeasible allocations and Pareto optimalityCompetitive equilibrium