Economics · General Equilibrium Theory
Consider the following statements about Multiple Equilibria in General Equilibrium: 1. Multiple equilibria can arise even in economies satisfying all Arrow-Debreu assumptions. 2. The index theorem implies that the number of locally stable equilibria must be odd. 3. Sonnenschein-Mantel-Debreu theorem shows that excess demand functions can take virtually any continuous shape, permitting multiple equilibria. 4. Uniqueness of equilibrium is guaranteed if the economy satisfies the weak axiom of revealed preference at the market level. Which combination is correct?
- 11 and 3 only
- 22 and 4 only
- 31, 2 and 3 only
- 41, 2, 3 and 4✓
Correct answer
1, 2, 3 and 4
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