Alice has convex preferences over consumption bundles containing goods x and y. Where (x,y) is the consumption bundle, Alice's preferences are as...
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Alice has convex preferences over consumption bundles containing goods x and y. Where (x,y) is the consumption

bundle, Alice's preferences are as follows:

(5,2) ~ (4,2) > (3,2) ~  (3,5) ~ (3,6)


a) Construct Utility function that can represent Alice's preferences. (Hint: Try one of the 'types' of utility functions we have seen in lecture)

b) Name another utility function 

c) Are Alice's preferences strictly convex? Explain why or why not

d) Suppose Alice's income is 20 and while the bundle (5,2) is affordable, the bundle (3,5) is not. This means that Px/Py <___,

Top Answer

(a) The utility function u = Min(x,2y) satisfies the preferences of... View the full answer

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