All Questions
4 questions
3
votes
3
answers
636
views
The formula for expansion path
Is there a way how to precisely compute the expansion path?
I know a consumer's utility function $U(\boldsymbol{x})$, I know the budget constraint $\sum P_i x_i \leq M$, I am able to compute the ...
- 834
2
votes
1
answer
71
views
When the global optimal is outside of the constraint set, what will be the demand?
$u:\mathbb R^n\to\mathbb R$ is a quasi-concave utility function so the indifference curves are convex.
$a,b\in\mathbb R^n$ are two points. Our budget set is the (one-dimensional) segment $[a,b]$ that ...
- 2,084
1
vote
1
answer
741
views
Generalizing demand for perfect substitutes utility function
I have the utility function:
$U(x_1,...,x_n)=a_0+\sum_{i=1}^{n}a_ix_i\;\;\;\;\;\;\;\;\;a_j\in\mathbb{R}_+ \;\;\forall j=\{0,...,n\}$ (maybe $a_0$ could be zero)
$\sum_{i=1}^{n}a_i\in (0,K)\;\;\;$ ...
- 943
1
vote
0
answers
103
views
On demand functions and Engel curves
A consumer has utility function $U(x,y)=(x−2)y$, where $x≥2$ and $y≥0$. The price of $x$ is $P_x$, the price of $y$ is $P_y$ and the consumer's income is $I>2P_x$. ($x$ and $y$ do not have to be ...
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