2. Based on your results in part 1 and the relevant concepts, a. Are your preferences strictly monotonic? Why or why not? b. If your preferences are not strictly monotonic, what do your results in part 1 imply about each of the two commodities and your preferences?

2. Based on your results in part 1 and the relevant concepts, a. Are your preferences strictly monotonic? Why or why not? b. If your preferences are not strictly monotonic, what do your results in part 1 imply about each of the two commodities and your preferences?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

II. Your preferences are represented by the utility function U(x₁, x₂) = (x² − x²) 0.5 for x₁ > 0, x₂ >
0, and x² > x².

2. Based on your results in part 1 and the relevant concepts,
a. Are your preferences strictly monotonic? Why or why not?
b. If your preferences are not strictly monotonic, what do your results in part 1 imply about
each of the two commodities and your preferences?

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