ajaz_204_2013_2014_HW_5

True or false a small increase in the minimum amount

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 2 is a “neutral” good. True or false: a small increase in the minimum amount of good 2 that the consumer must consume (i.e. ) will definitely lower the consumer’s optimal utility? 1 University of Toronto, Department of Economics, ECO 204, 2013 - 2014 Question 3 ( ) defined over the consumption set Consider a (rational) consumer with an arbitrary utility function {( } Assume the consumer likes at least one good (so that she’ll spend her entire income). Solve the ) general (two good) UMP (i.e. derive all possible scenarios and their respective conditions): ( ) ⏟ ⏟ Question 4 Consider a (rational) consumer with a Cobb-Douglas utility function defined over the consumption set {( } Assume that ) Solve the Cobb-Douglas UMP by taking a log positive monotonic transformation of the Cobb-Douglas utility function. You should compare your answers to the regular Cobb-Douglas UMP. Hint: Exploit the “rules” derived from the general UMP. Question 5 ( ) defined over the consumption set Consider a (rational) consumer wit...
View Full Document

This homework help was uploaded on 02/15/2014 for the course E 204 taught by Professor Ajaz during the Winter '13 term at University of Toronto- Toronto.

Ask a homework question - tutors are online