1
$\begingroup$

I am given a utility function $u(x)=x_1^2+x_2^2$ and I am asked to see whether this function satisfies strict convexity. The answer is saying this:

We see that $u(3,0) = 9$, $u(0,3) = 9$, $u(1.5,1.5) = 4.5$. Here, $x = (3,0)$, $y = (0,3)$, and $z = (3,0)$, we have $x ≳ z$ and $y ≳ z$, but $tx + (1 − t)y ≺ z$ for $t=1/2$.

I am lost at this part here $tx + (1 − t)y ≺ z$ for $t=1/2$; isn't the utility still 9, which is the same as the utility of every bundle there?

$\endgroup$

1 Answer 1

2
$\begingroup$

$$\bigg(\frac{1}{2}3\bigg)^2+\bigg(\frac{1}{2}3\bigg)^2=\bigg(\frac{3}{2}\bigg)^2+\bigg(\frac{3}{2}\bigg)^2=\frac{3^2}{2^2}+\frac{3^2}{2^2}=\frac{9}{4}+\frac{9}{4}=\frac{9}{2}<9.$$

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.