Question: consider the following simpler problem with qRm being the unique state price vector satisfying the condition that qTA=p : maxcR,bRms.t.u0(c)+i=1miu1(bi)c+qTbwc0bi0,fori=1,,m By assumption, qi>0 for i=1,,m.

consider the following simpler problem with qRm

consider the following simpler problem with qRm being the unique state price vector satisfying the condition that qTA=p : maxcR,bRms.t.u0(c)+i=1miu1(bi)c+qTbwc0bi0,fori=1,,m By assumption, qi>0 for i=1,,m. Show that this problem always has a solution. [3 marks] Assume that (c,b) is a solution to the problem. Show that we can always find an xRn such that b=Ax. consider the following simpler problem with qRm being the unique state price vector satisfying the condition that qTA=p : maxcR,bRms.t.u0(c)+i=1miu1(bi)c+qTbwc0bi0,fori=1,,m By assumption, qi>0 for i=1,,m. Show that this problem always has a solution. [3 marks] Assume that (c,b) is a solution to the problem. Show that we can always find an xRn such that b=Ax

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