Consider the following graph of a two-commodity consumption…
Consider the following graph of a two-commodity consumption space. There is a blue budget line whose vertical intercept is 30 and its horizontal intercept is not marked. Suppose that the agent has an income of $1200. What is the price of the first commodity?
Read DetailsConsider the following graph of a two-commodity consumption…
Consider the following graph of a two-commodity consumption space. There is a grid that specifies a set of bundles A,B,…,H,I. Additionally, there is a set of indifference curves that are thin downward slopping curves that do not cross.If an agent who has preferences satisfying more is better and these indifference curves is offered to choose a bundle from {A,B,C,D,E,F,G,H,I}, which of the following bundles is a possible choice if the agent chooses only what maximizes their utility.
Read DetailsConsider a complete and transitive preference on X=Rn. Call…
Consider a complete and transitive preference on X=Rn. Call this preference B. The Upper contour set of the preference at a bundle x is U(B,x) is the set of bundles in X that are at least as good as x under the preference B. We say that the upper contour sets of B at x, U(B,x) is visible from x when for each y in U(B,x), the segment that connects x to y is in U(B,x). Then, B is convex if and only if it for each x in X, U(B,x) is visible from x.
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