Principles of Microeconomics Lecture 7 – Buying and Selling
Trade involves exchange -- when something is bought something else must be sold.
The list resources units with which a consumer starts is his endowment
A consumer’s endowment will be denoted by the vector (omega)
o
The endowment point is always on the budget constraint, so price changes pivot the constraint about the
endowment point
Trade involves exchange -- when something is bought something else must be sold.
The list resources units with which a consumer starts is his endowment
A consumer’s endowment will be denoted by the vector (omega)
o
The endowment point is always on the budget constraint, so price changes pivot the constraint about the
endowment point
