(1.4.) General equilibrium of household sector in closed economy (model of
pure exchange economy)
Exogenous parameters:
Preferences of households (at least 2 households) – utility functions:
U1 = U1 (X1, Y1);
U2 = U2 (X2, Y2).
Final goods endowments of households :
X0 = X10 + X20;
Y0 = Y10 + Y20.
Market structure on the final goods markets – perfect competition.
Endogenous parameters:
Equilibrium consumption of final goods by households: X1*, X2*, Y1*, Y2*;
Equilibrium relative prices of final goods – Px*/Py*.
Graphical illustration of exogenous parameters.
Graphical illustration of endogenous parameters of the model.