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Unformatted text preview: (e) U(x,y) = max{2x+y, 2y+x} In which of these cases are preferences convex? 6. Suppose there are only two alternatives x and y for Ali, i.e., X = {x, y}, and Ali strictly prefers x over y (a) suggest a utility function for Ali (b) Suggest another one (c) Is the utility function you suggested in (b) a monotonic transformation of the function you suggested in (a)? 7. Consider the following utility function u(x 1 , x 2 ) = min{x 1 , x 2 }, x 1 , x 2 ≥0 (a) Let x 2 = 1. Write an algebraic expression for MU 1 as a function of x 1 . Sketch the graph of MU 1 (b) let x 1 = 4. Write and algebraic expression for MU 2 as a function of x 2 . Sketch the graph of MU 2 (c) Compute the value of MRS at (x 1 ,x 2 )=(4,1) directly. Is MRS = MU 1 /MU 2 at that point? 8. (from another university’s problem sets) 9. (previous prelim in Econ301)...
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This test prep was uploaded on 02/19/2009 for the course ECON 3010 taught by Professor Wissink during the Fall '07 term at Cornell.
 Fall '07
 WISSINK
 Microeconomics

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