Tuesday, April 13, 2010

Existence and Uniqueness of Competitive Equilibrium

The interested student should ask when do the conditions that make these results work fail to attain. That is, when is the offer curve discontinuous? That would be a departure here, but might help the students to understand why indifference curves are convex and what would happen if "they curved the other way." Also, for the sophisticated in the audience it might be mentioned that the argument makes sense for the two-goods cases only and that with more goods a different sort of math result is needed (fixed point theorems) to get the outcome.

This is the audio only in case the student prefers to play with the spreadsheet while listening.