A consumer has preferences over bundles of two goods with indifference curves defined by -¤2 = ½ for k > 0. (a) Find a utility function representing these preferences assuming that the consumer's pref- erences are monotone. (b) Give an example of a utility function representing non-monotone preferences with the same indifference curves. (c) Show that indifference curves of the form x₂ = x² + k for k € R cannot arise from monotone preferences.

A consumer has preferences over bundles of two goods with indifference curves defined by -¤2 = ½ for k > 0. (a) Find a utility function representing these preferences assuming that the consumer's pref- erences are monotone. (b) Give an example of a utility function representing non-monotone preferences with the same indifference curves. (c) Show that indifference curves of the form x₂ = x² + k for k € R cannot arise from monotone 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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