Problem
Consider an exchange economy with the two consumers. Consumer 1 has utility function u1 (x1,x2)=x2 and endowment e1=(1,1) and consumer 2 has utility function u2 (x1,x2)=x1+x2 and endowment e2=(1,0).
(a) Which of the hypotheses of Theorem fail in this example?
(b) Show that there does not exist a Walrasian equilibrium in this exchange economy.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.