3. Competive budget Consumption set X and it's price p C R With the wealth w>0 > Definition: Walras(competive) budget set B(p,w)={x∈:pX≤w Proposition: if X is concave, then is B(p, w) lecture 5 for Chu Kechen Honors College
lecture5 for Chu Kechen Honors College 3.Competive budget ➢ Consumption set X and it’s price with the wealth w>0. ➢ Definition: Walras (competive) budget set ➢ Proposition4: if X is concave, then is n p ( , ) { : } n B w w p x p x = + B w ( , ) p
4. Demand function For any p and w are strictly positive, the corresponding demand set x(p, w)are nonempty, if x(p, w) is single point, we call it the Walrasian( marshallian) demand function x(p, w)is homogenous of degree zero and satisfied Walras'law. That is px-w for all X∈x(p,w)andp>0,w>0 (we will prove them next lecture) lecture 5 for Chu Kechen Honors College
lecture5 for Chu Kechen Honors College 4.Demand function ➢ For any p and w are strictly positive, the corresponding demand set x(p,w) are nonempty, if x(p,w) is single point, we call it the Walrasian( Marshallian) demand function. ➢ x(p,w) is homogenous of degree zero and satisfied Walras’ law. That is px=w for all (we will prove them next lecture) x x p ( , ) and 0, 0 w p w