Timeline for A question about the property of quasi-linear preference
Current License: CC BY-SA 4.0
9 events
| when toggle format | what | by | license | comment | |
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| Nov 3, 2019 at 19:03 | comment | added | Aqqqq | Would it be also possible to explain the reason behind this property verbally without use of proof? | |
| Nov 3, 2019 at 19:02 | comment | added | Aqqqq | Thank you for your answer. But I still think that since $MUx=MU_y/p_y∗p_x$, "one unit more of the numeraire good ...all other goods" is also applicable for general case without the assumption of quasi-linear preference (assumption of "quasi-linear preference" only contributes to the part "no matter how much unit of this good 1 have already been present in the consumption bundle"). Am I correct and if I am not, what mistake did I made in my reasoning? | |
| Nov 3, 2019 at 16:33 | vote | accept | Aqqqq | ||
| Oct 31, 2019 at 2:33 | history | edited | Art | CC BY-SA 4.0 |
added 524 characters in body
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| Oct 31, 2019 at 2:32 | comment | added | Art | Please see if my edited answer helps. | |
| Oct 30, 2019 at 20:00 | comment | added | Aqqqq | As for "one unit more of the numeraire good (good 1) give the same additional utility as spending an additional amount of wealth equal to the cost of one unit of good 1 on all other goods": From utility maximization, I can get $MU_x/p_x = MU_y/p_y$. Hence $MU_x = MU_y/p_y*p_x$ I am not sure whether it indeed reflect "one unit more of the numeraire good ...all other goods. Wouldn't it be applicable without the assumption of quasi-linear preference? | |
| Oct 30, 2019 at 20:00 | comment | added | Aqqqq | I am not sure whether my answer is correct: the marginal utility of good x will be constant no matter how many good x have already been consumed (differentiating the utility function against x). | |
| Oct 30, 2019 at 19:47 | comment | added | Aqqqq | How would you interpret the statement? (It is not a homework question. I just saw the statement and want to gain more understanding about it.) | |
| Oct 30, 2019 at 7:27 | history | answered | Art | CC BY-SA 4.0 |