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What do we mean by well-behaved preferences? How do the indifference curves look like for such preferences? Provide an example, in terms of a utility function, where preferences are not well-behaved and illustrate. Provide a figure with indifference curves and a budget line where there are exactly two solutions to the utility maximization problem.

What do we mean by well-behaved preferences? How do the indifference curves look like for such preferences? Provide an example, in terms of a utility function, where preferences are not well-behaved and illustrate. Provide a figure with indifference curves and a budget line where there are exactly two solutions to the utility maximization problem.

Microeconomic Theory
Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.1P
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What do we mean by well-behaved preferences? How do the indifference curves look like for such
preferences? Provide an example, in terms of a utility function, where preferences are not well-behaved
and illustrate. Provide a figure with indifference curves and a budget line where there are exactly two
solutions to the utility maximization problem.

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