=+c. Next, suppose that there was a third person in our economy: your identical twin who shares
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=+c. Next, suppose that there was a third person in our economy: your identical twin who shares your tastes and endowments. Suppose the terms of trade for transferring consumption in one state to the other remain unchanged, and suppose an equilibrium exists in which everyone ends up at an interior solution. Illustrate what this would look like, given that there are now two of you and only one of me. (Hint: It should no longer be the case that our indifference curves within the box are tangent to one another because equilibrium now implies that two of your trades have to be exactly offset by one of mine.)
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Microeconomics An Intuitive Approach With Calculus
ISBN: 9781337335652,9781337027632
2nd Edition
Authors: Thomas Nechyba
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