Question

# Consider the preference relation over R2+ such that, for any

x,y ∈ R2+, x y if and only if ex1 + 1 ≥ ey1 +1. (a) Illustrate the indifference curves of this preference relation. (b) Is this preference relation monotone? (c) Is this preference relation convex? (d) Provide a utility function u(x1,x2) that represents this preference relation. (e) Given prices p = (p1,p2) > 0 and income m > 0, derive the consumer's demand functions.

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