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Results tagged with consumer-theory
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user 42700
the study of consumer choice and its fundamental underpinnings in preferences and constraints.
1
vote
1
answer
84
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Proving that strict convexity is violated
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) …
- 57
1
vote
3
answers
270
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FOC greater than 0
I couldn't get my head around this part. Basically, I have to prove that a consumer has to hold a positive amount of assets, i.e. $x > 0$.
A hint suggested to find take the FOC, and then set $x = 0$ a …
- 57