Suppose a consumer in a competitive market maximises utility subject to a standard budget constraint. a. Given their resulting demand function, what assumptions would be required for one to conclude that when the price of good 1 goes up the consumer buys less of that good? b. Given their resulting demand function, what assumptions would be required for us to conclude that when the price of good 1 goes up the consumer buys more of good 2?

Suppose a consumer in a competitive market maximises utility subject to a standard budget constraint. a. Given their resulting demand function, what assumptions would be required for one to conclude that when the price of good 1 goes up the consumer buys less of that good? b. Given their resulting demand function, what assumptions would be required for us to conclude that when the price of good 1 goes up the consumer buys more of good 2?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 1SQ

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