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Questions tagged [perfect-complements]

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hicksian demand of perfect complements [closed]

As the title states, I want to know how to derive the hicksian demand of perfect complements $\text{min} \, \{x1,x2\}$. Thanks in advance. Also, no price is given, or budget. my main question is ...
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Unusual perfect complements utility function min{ax+y, x+2y} [closed]

What's the graph for this utility function? How can it be represented graphically? Is this function perfect complements? I do not fully understand that in the question attached in the picture, the ...
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2answers
285 views

Relationship between convexity and a perfect complements type utility function

Consider someone who consume two goods and hates them both. Given the utility function: U(x,y)= -max{x,y} 1.What would be the shape of the indifference curve? 2.Why are these preferences weakly ...
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0answers
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Elasticity of substitution meaning

If I computed an elasticity of substitution of f.e. 0.9 between capital and labour, does this implicate that the factors are rather well substitutable or not? Since for 0 they are perfect complements ...
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2answers
528 views

Perfect complement graph and isoquant

$f(x_1,x_2) = min \{x_1,x_2\} + x_2$ if that was the production, what would the isoquant be? Would it simply follow $x_1 = x_2$? I'm not entirely sure what it the graph would look like.
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Can a complement good be free or have a fixed cost?

I was not around at this time but I know roads(existing for bikes) and gas(existing for tractors) were complements for cars. I was looking at complements for computers and noticed the ARPANET could ...
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1answer
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Income effect for complements

Suppose u(x,y)=min(x,2y) and the price of X is 1, the price of Y is 1 and income is $12. If the price of X increases to 2, the income effect is supposed to be -1. I keep getting zero for some reason. ...
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1answer
141 views

Optimal consumtion bundle of lemons and sugar [closed]

Alex consumes only lemons and sugar. For each lemon he requires exactly 2 spoons of sugar. He doesn't like more sugar on his lemons, and he won't eat lemons with less sugar. What is Alex's optimal ...
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1answer
167 views

Doubt regarding Walrasian equilibrium with complements for both agents

There are two goods $1,2$ and two agents $ 1,2 $. Both have the utility function $ u_{i}=\min({x_{1i},x_{2i}}) $ for agent $i$ .The endowments are $(1,3)$ and $(3,1)$ for agent $1$ and $2$ ...
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1answer
1k views

Perfect Complements - Walrasian Equilibrium

For a homework , I struggled to solve the following question but couldn't go further: endowment of person 1 = (30,0) endowment of person 2 = (0,20) utility ...
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1answer
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Do perfect complements have to be normal goods? If so, why?

Two goods $x,y$ are perfect complements if they have the utility function $$U(x,y) = \min \lbrace ax,by \rbrace $$ $$a,b \in \Bbb{Q}^+$$ My professor said $x,y$ have to be normal goods but didn't ...
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1answer
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Basic microeconomics: supply, demand and substitutes in production

The question is: explain the change in the market for skim milk, if demand for ice cream rises. I'd say these two are unrelated in consumption (saying they're substitutes is kind of stretching it), ...
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2answers
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Perfect complement preferences in an exchange economy

So I have an exam in a bit, I understand that to find the optimal choice you have to equate tangent of the two indifference curves. However, if the other indifference curve is a perfect complement, ...
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1answer
998 views

Pure exchange economy with two consumers and non differentiable utility functions

We have a pure exchange economy, two consumers $A,B$ and two goods $x,y$. The utility functions are as follows $$u_A=\min\{x_A,y_A\}\qquad u_B=\min\{x_B,\sqrt{y_B}\}$$ The endowments are $$\omega_A=(...