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Unformatted text preview: ( x , t ) and ( y , t + 1 ) is independent of t . Continuity. 1. Dene formally the continuity assumption for this context. 2. Show that the preference relation has a utility representation. 3. Verify that the preference relation represented by the utility function u ( x ) t (with < 1 and u continuous and increasing) satises the above properties. 4. Formulize a concept one preference relation is more impatient than another. 5. Discuss the claim that preferences represented by u 1 ( x ) t 1 are more impatient than preferences represented by u 2 ( x ) t 2 if and only if 1 < 2 . Problem 6 (Tel Aviv 2003) Consider the following consumer problem. There are two goods, 1 and 2. The consumer has a certain endowment. Before the con-sumer are two exchange functions: he can exchange x units of...
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- Fall '10