3.3.

COMPETITIVE EQUILIBRIUM 27

1
Figure 3.1: Characterization of Z (0) - impossible
28 CHAPTER 3. ARROW-DEBREU EXCHANGE ECONOMIES

1
Figure 3.2: Characterization of Z (0) - impossible
3.3. COMPETITIVE EQUILIBRIUM 29

1
Figure 3.3: Characterization of Z (0) - impossible
30 CHAPTER 3. ARROW-DEBREU EXCHANGE ECONOMIES

1
Figure 3.4: Characterization of Z (0)
3.4. MATHEMATICAL APPENDIX 31

Figure 3.5: Parametrization of a 1-manifold X

3.3.4 Competitive equilibrium in production economies

[...]

3.4 Mathematical appendix

Theorem 23 (Inverse function theorem - Local). Let f : Rn ! Rn be C 1 :
If Df has rank n; at some x 2 Rn , there exist an open set V Rn and
a function f 1 : V ! Rn such that f (x) 2 V and f 1 (f (z)) = z in a
neighborhood of x:

Denition 24 A subset X Rm is a smooth manifold of dimension n if for

any x 2 X there exist a neighborhood U X and a C 1 function f : U ! Rm
such that Df has rank n in the whole domain.