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  3. 1. (25) consider an economy with three consumers a

1. (25) Consider an economy with three consumers and two goods x1 and x2. They...

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Accounting

1. (25) Consider an economy with three consumers and two goods x1 and x2. They all have the following utility function u (x, x) = max{xi, x}. All agents further have an endowment of 3 units of both goods: e (3,3). = (a) Show that no Walrasian equilibrium exists in this economy (hint: you might want to check the core). (b) Check all the assumptions that are needed for the usual existence theorem for Walrasian equilibrium. Which one(s) are violated

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