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Question: omy where preferences and endowments 2 20 consider an edgeworth...

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omy where preferences and endowments 2. /20) Consider an Edgeworth box econ are given by d(z, zl) = (zl): (x), ei = (6,6) (a) 4 Carefully state the theorem regarding thé existence of a Walrasian equilibrium that was given in the lectures. (b) [6) Using the normalization p2 - 1, find the Walrasian equilibrium. (c) 4] Carefully state the Walras Law and verify that it holds. (d) [6] Can the allocation ((5,23.4), (5, 2.6)) be supported as an equi- librium with transfers? If yes, find the supporting prices (normalize the price of the second good to one) and transfers. If no, explain.
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