If U, V: R2 → R are such that U is a strictly increasing transformation of V then U and V must represent the same preferences. (d) If the substitution effect is negative (in response to a price increase) then we know the Walrasian demand for the good in question (in response to the same price increase) will also be negative. (e) A consumer’s utility is continuous and strictly monotone and when prices are given by p and income is I her Walrasian demand yields a utility of 7. Then, any bundle that yields a utility of at least 8 must cost more than I

If U, V: R2 → R are such that U is a strictly increasing transformation of V then U and V must represent the same preferences. (d) If the substitution effect is negative (in response to a price increase) then we know the Walrasian demand for the good in question (in response to the same price increase) will also be negative. (e) A consumer’s utility is continuous and strictly monotone and when prices are given by p and income is I her Walrasian demand yields a utility of 7. Then, any bundle that yields a utility of at least 8 must cost more than I

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter6: Demand Relationships Among Goods

Section: Chapter Questions

Problem 6.9P

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