Question

A consumer with convex, monotonic preferences consumes non-negative amounts of x1 and x2 Given u(x1,x2)=x1^a ....

A consumer with convex, monotonic preferences consumes non-negative amounts of x1 and x2

Given u(x1,x2)=x1^a . x2^(.5-a) represents said preferences

What restrictions must you place on a? Explain.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose that a consumer has preferences over bundles of non-negative amounts of each two goods, x1...
Suppose that a consumer has preferences over bundles of non-negative amounts of each two goods, x1 and x2, that can be represented by a quasi-linear utility function of the form U(x1,x2)=x1 +√x2. The consumer is a price taker who faces a price per unit of good one that is equal to $p1 and a price per unit of good two that is equal to $p2. An- swer each of the following questions. To keep things relatively simple, focus only on...
Suppose that a consumer has perfect complements, or Leontief, preferences over bundles of non-negative amounts of...
Suppose that a consumer has perfect complements, or Leontief, preferences over bundles of non-negative amounts of each of two commodities. The consumer’s consumption set is R^2(positive). The consumer’s preferences can be represented by a utility function of the form U(x1, x2) = min(x1, x2). 1. Illustrate the consumer’s weak preference set for an arbitrary (but fixed) utility level U. 2. Illustrate a representative iso-expenditure line for the consumer. 3. Illustrate the consumer’s utility-constrained expenditure minimisation problem. 4. Illustrate the derivation...
2. Assume a consumer has as preference relation represented by u(x1; x2) = ax1 + bx2...
2. Assume a consumer has as preference relation represented by u(x1; x2) = ax1 + bx2 with x 2 C = R2 +; and a; b > 0: Answer the following: a. Show the preference relation this consumer is convex and strictly monotonic. b. Graph the indiference curves for this consumer c. Compute the MRS between good 1 and good 2, and explain why it coincides with the slope of an indiference curve. d. Characterize the demand functions/correspondences for this...
Consider a consumer who consumes two goods and has utility function u(x1,x2)=x2 +√x1. The price of...
Consider a consumer who consumes two goods and has utility function u(x1,x2)=x2 +√x1. The price of good 2 is 1, the price of good 1 is p, and income is m. (1) Show that a) both goods are normal, b) good 1 is an ordinary good, c) good 2 is a gross substitute for good 1.
Consider a consumer that has preferences defined over bundles of non-negative amounts of each of two...
Consider a consumer that has preferences defined over bundles of non-negative amounts of each of two commodities. The consumer’s consumption set is R2+. Suppose that the consumer’s preferences can be represented by a utility func- tion, U(x1,x2). We could imagine a three dimensional graph in which the “base” axes are the quantity of commodity one available to the consumer (q1) and the quantity of commodity two available to the consumer (q2) respec- tively. The third axis will be the “height”...
1. A consumer has an utility function given by U(x1, x2) = ? log(x1) + (1...
1. A consumer has an utility function given by U(x1, x2) = ? log(x1) + (1 ? ?) log(x2), with0<?<1. HerincomeisgivenbyM,andthepricesshefacesarep1 andp2, respectively. What is the optimal choice of x1 and x2? Follow the steps outlined in the math refresher notes. How does this result compare to the one in the notes? Explain.
What is the generating function for the number of non-negative integer solutions to x1 + x2...
What is the generating function for the number of non-negative integer solutions to x1 + x2 + x3 + x4 + x5 = 50 if: 1.) There are no restrictions 2.) xi >= 2 for all i 3.) x1 <= 10 4.) xi <= 12 for all i 5.) if x1 is even
1. Al Einstein has a utility function that we can describe by u(x1, x2) = x21...
1. Al Einstein has a utility function that we can describe by u(x1, x2) = x21 + 2x1x2 + x22 . Al’s wife, El Einstein, has a utility function v(x1, x2) = x2 + x1. (a) Calculate Al’s marginal rate of substitution between x1 and x2. (b) What is El’s marginal rate of substitution between x1 and x2? (c) Do Al’s and El’s utility functions u(x1, x2) and v(x1, x2) represent the same preferences? (d) Is El’s utility function a...
Explain what it means for a consumer's preferences to be represented by a utility function u(x1,x2)
Explain what it means for a consumer's preferences to be represented by a utility function u(x1,x2)
The utility function U(x1, x2) = lnx1 ^5 + lnx2^2 represents Cobb- Douglas preferences. Show if...
The utility function U(x1, x2) = lnx1 ^5 + lnx2^2 represents Cobb- Douglas preferences. Show if it is true or false. (without using graph)
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT