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.
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.
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.7P
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