GA1s08 - an economic analysis 2 Construct a utility function for perfect substitute goods and explain what this function needs to incorporate Is

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University of Wisconsin Department of Economics Econ 301: Intermediate Microeconomic Theory Korinna K. Hansen Group Assignment 1 Due Date : Reading Assignment: Varian, Chapter 4 Problem Assignment : Here are some critical questions for our class discussion regarding utility. For each one of the following questions you should be able to communicate to an audience all important relevant information in a well-organized and concise way. Make sure that you are ready to present enough detail. 1). There have been two different ways in viewing utility: the old way and the new way. Be prepared to describe the two and describe why the new way is the only useful one for
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Unformatted text preview: an economic analysis. 2). Construct a utility function for perfect substitute goods and explain what this function needs to incorporate. Is there only one unique utility function that can describe perfect substitutes? 3). Construct a utility function for perfect complements and explain what this function needs to incorporate. Is there only one unique utility function that can describe perfect complements? 4). What does the Cobb-Douglas utility function look like? What is special about it? 5). What is marginal utility and what is the marginal rate of substitution? Be prepared to derive and explain their relationship....
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This note was uploaded on 08/08/2008 for the course ECON 301 taught by Professor Hansen during the Spring '08 term at Wisconsin.

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