A well-behaved utility function is assumed to exhibit monotonic and convex preferences. (1) Define monotonic preferences. Graphically illustrate that indifference curve is negatively sloped under this assumption. (2) Define a convex set and the weakly preferred set. Use the x-y diagram to draw the weakly preferred set for (x,.y,) and (x,y;) under the assumption of "convex preferences" and graphically illustrate the meaning of the assumption.

A well-behaved utility function is assumed to exhibit monotonic and convex preferences. (1) Define monotonic preferences. Graphically illustrate that indifference curve is negatively sloped under this assumption. (2) Define a convex set and the weakly preferred set. Use the x-y diagram to draw the weakly preferred set for (x,.y,) and (x,y;) under the assumption of "convex preferences" and graphically illustrate the meaning of the assumption.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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