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5. Consider an economy with two goods and two states of nature. The states are indexed by s=1,2. Let xnsi be the quantity of good
5. Consider an economy with two goods and two states of nature. The states are indexed by s=1,2. Let xnsi be the quantity of good n that consumer i consumes in state s. There are two consumers i= 1,2 with endowments e1=(e111,e211,e121,e221)=(1,2,3,4) and e2= (e112,e212,e122,e222)=(4,3,2,1) respectively. Consumers both regard the two states as equally likely and they have identical von Neumann-Morgenstern utility functions u(x1si,x2si)=31lnx1si+32lnx2si Derive the Arrow-Debreu equilibrium. 5. Consider an economy with two goods and two states of nature. The states are indexed by s=1,2. Let xnsi be the quantity of good n that consumer i consumes in state s. There are two consumers i= 1,2 with endowments e1=(e111,e211,e121,e221)=(1,2,3,4) and e2= (e112,e212,e122,e222)=(4,3,2,1) respectively. Consumers both regard the two states as equally likely and they have identical von Neumann-Morgenstern utility functions u(x1si,x2si)=31lnx1si+32lnx2si Derive the Arrow-Debreu equilibrium
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