Consider a consumer with preferences represented by the utility function: u (x, y) = x+y a. Draw a set of indifference curves. b. Are these preferences strictly convex? c. Are these preferences locally non-satiated? d. Derive the marginal rate of substitution. e. Suppose instead, the utility function is: u (x, y) = x+2y Does the utility function represent the same preferences? Explain in detail.

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.7P
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Consider a consumer with preferences represented by the utility function:
u (x, y) = x+y
a. Draw a set of indifference curves.
b. Are these preferences strictly convex?
c. Are these preferences locally non-satiated?
Derive the marginal rate of substitution.
Suppose instead, the utility function is:
d.
e.
u (x, y) = x+2y
Does the utility function represent the same preferences? Explain in detail.
Transcribed Image Text:Consider a consumer with preferences represented by the utility function: u (x, y) = x+y a. Draw a set of indifference curves. b. Are these preferences strictly convex? c. Are these preferences locally non-satiated? Derive the marginal rate of substitution. Suppose instead, the utility function is: d. e. u (x, y) = x+2y Does the utility function represent the same preferences? Explain in detail.
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