Does the crusoe economy have a competitive equilibrium

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Question: Suppose that Robinson Crusoe regards employment and goods as perfect substitutes on the demand side, and produces with a decreasing returns technology.

(a) Does the Crusoe economy have a competitive equilibrium?

(b) Illustrate the process whereby the Walrasian auctioneer adjusts real wages in order to find it.

(c) Draw the excess demand functions for the goods and labour markets.

Reference no: EM131505155

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