Proofs to review for midterm 1:
1. A preference relation on X is monotone if x; y 2 X and y > x implies
y
x: A preference relation
on X is strongly monotone if x; y 2 X,
y x and y =
6 x implies that y
Suggested solution to review midterm 1
Question 1 (30 points) (Consumer Theory)
Toby consumes two goods x1 and x2 : The price of good 1 is p1 > 0; the price of
good 2 is p2 = 1: His income is m = 120.
Midterm 1
Question 1 (30 points)
Mason consumes two goods x1 and x2 : The price of good 1 is p1 > 0; the
price of good 2 is p2 = 1: His income is w. Masons preferences for the
two goods are represente
Econ6201, Problem set 1
Let X = RL
+ in all questions, unless otherwise noted.
In addition to the relevant material on the budget set, preferences and utility, you
might nd useful reviewing logarithm