# Questions tagged [utility]

Utility, or usefulness, is the (perceived) ability of something to satisfy needs or wants.

466 questions
Filter by
Sorted by
Tagged with
16 views

### Demand and Utility

A consumer has an endowment vector $w$; at prices $p$ his demand for the first good exceeds his endowment; $x_1^+(p; pw)>w_1$ then a small increase of $p_1$ will lower his utility. Logically, it ...
15 views

### Derive utility function from expenditure function [closed]

How can I obtain utility function from expenditure function e(p1,p2,u) = u*min(p1,p2)
13 views

### Utility maximization derivative calculation [closed]

What is the derivative function to solve the utility?
21 views

### Utility functions and positive monotone transformations

We let $g(z)$ be a strictly monotonous function so: $$\frac{dg(z)}{dz}>0$$ Consumer 1 has preferences given by the utility function $u(x_1,x_2)=ln(x_1)+2ln(x_2)$, while consumer 2 has preferences ...
40 views

### Quadratic utility: monotonicity and risk aversion

I am taking macro class this fall. One of the problems asks whether decreasing absolute risk-aversion and ever-increasing consumption are two unattractive implications of the quadractic utility ...
16 views

### Show LNS function [closed]

O have the following utility function. $$u(x,y) = y- a(x -b) ^2$$ where $a>0$ This function is locally nonsatiated. Well, in mathematical terms, how can I show it? LNS definition $x,y\in X$ there ...
34 views

### Compare taxes Cobb-Douglass and more

Let a utility function for a consumer be defined as $u(x_{1},x_{2})=x_{1}^{1/2} x_{2}^{1/2}$. With the budget $x_{1}p_{1}+x_{2}p_{2}=m$. With values $p_1=p_2=1, m=32$. The state now adds a tax of unit ...
141 views

19 views

### Calculating risk interest rate within a two period model

I am trying to calculate how to determine the interest rate ( = risk free rate + premium) within the following model where a consumer decides to invest in a safe asset or in a risky asset. The utility ...
112 views

### How do I solve the Envelope Theorem condition in Microeconomics?

I am preparing myself for a MSc in Economics and don't understand why, according to the Envelope Theorem, when deriving a utility function $u(θ, q(θ), r(θ)) = B(q-r) - C(\frac{q}{θ})$, its derivative ...
332 views

### Why do many papers not write the actual utility function?

Why do many papers write the intertemporal maximisation problem for the household as \begin{equation}E_{0} \sum_{t=0}^{\infty} \beta^{t} U\left(C_{t}, N_{t}\right)\end{equation} and then do not write ...
25 views

### Expenditure function. Prove that this set is bounded

I need to prove that the following set is bounded in order to derive the expenditure function: $e(p,v)=min_x px$ ST $\{x \in R^n_+$ such that $U(x)\geq v\}$. Knowing that $U(x):R^n \longrightarrow R$ ...
47 views

### Is it considered acceptable or unacceptable to use currency as a measure of utility?

There will always exist at least one economist who condones measuring utility in US dollars and another who does not. However, I am wondering which way the majority of contemporary economists lean. ...
83 views

55 views