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Unformatted text preview: Claim: Any homothetic, continuous, and monotonic preference relation on the commodity bundle space can be represented by a utility func-tion that is homogeneous of degree one. Proof: We have already proven that any bundle x has a unique bundle ( t ( x ) , . . . , t ( x )) on the main diagonal so that x ∼ ( t ( x ) , . . . , t ( x )) , and that the function u ( x ) = t ( x ) represents ± . By the assumption that...
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This note was uploaded on 12/29/2011 for the course ECO 443 taught by Professor Aswa during the Fall '10 term at SUNY Stony Brook.
- Fall '10