【正文】 les net output vectors ...determines an allocation prices a summary of the process General equilibrium Robinson Crusoe’s problem Decentrali sation and Trade A manyperson Economy Why pricetaking? Excess demand Ines Equilibrium Allocations A manyperson economy Crusoe again... ?Must be utilitymaximising (consumption)... ?...profitmaximising (production)... ?....and satisfy materials balance (the facts of life) OK, let39。s behavioural response maps prices and ines into demands The allocation a just a minute! where do these ines e from??? How does a petitive allocation work? General equilibrium Robinson Crusoe’s problem Decentrali sation and Trade A manyperson Economy Why pricetaking? Excess demand Ines Equilibrium Allocations A manyperson economy ownership rights of everything on the island Where did 39。s do this for the manyperson case. What kind of allocation is an equilibrium? for each household subject to Uh(xh) max S pi xih ?Mh n i=1 subject to Ff(yf) ? 0 max S pi yif n i=1 for each firm xi ? yi + Ri and for each good... But what determines these aggregates? The basics of petitive equilibrium Can we add up across households like this...? S xih = xi nh h=1 Yes if i is a riv