# Tag Info

1 vote
Accepted

### Relationship between marginal utility and price?

Forget the historical "utility theory of value". In modern microeconomics' consumer theory, utility is ordinal and therefore marginal utility of a good per se is meaningless. The only ...
• 7,069

### Integral in front of utility function

This function is the welfare function of an individual, representative agentâ€”or householdâ€”as I believe that it is referred to in Ramsey-Koopmans-Cass (RKC) framework and as the DICE model interprets ...
Accepted

### Utility function with two goods with declining spending share on one good

For a formal treatment (if you aim at estimating some demand data), I recommend Deaton and Muellbauer (1980)'s almost ideal demand system. Also see the Wikipedia page. To make the expenditure share on ...
• 81
1 vote

### Price-consumption curve

There is already a good answer to this question by VARulle. I am just adding some details. Given $u(x,y)=2xy+y^2$, note that $u$ is an increasing function and its $\text{MRS}=\dfrac{y}{x+y}$ which is ...
• 9,216

### Why is incidence not included in social welfare maximization?

If I understand correctly, this is because in standard consumer theory, consumers don't hold money. They just spend all of their budget in consumption good. This fact is already captured by $d$ ...
• 81
1 vote

### Walrasian demand with a twist of Leontief function

$u(x_1,x_2)=\min(x_1,x_2)+5\max(x_1,x_2)=\max(x_1+5x_2,5x_1+x_2)$ which is not quasi-concave, but is an increasing quasi-convex function. So, demand will be at one of the two end-points of the budget ...
• 9,216
The Karush-Kuhn-Tucker theorem would work, because $$\frac{\partial f(\mathbb{x})}{\partial x_i} + \mathbb{\lambda} \frac{\partial \mathbb{g}(\mathbb{x})}{\partial x_i} = 0$$ implies  \frac{\...