For the case of two goods, give an example of a utility function U(x1, x2) that represents the preferences of a consumer who regards the two goods as perfect complements. Next, take the transformation f(U) = U³ of the your example utility function and explain if this newly gener ated function represents the original preferences. Further, provide clear arguments supporting or rejecting the claim that "f(U(x1, x2)) must be strongly increasing in (x1, x2)."
For the case of two goods, give an example of a utility function U(x1, x2) that represents the preferences of a consumer who regards the two goods as perfect complements. Next, take the transformation f(U) = U³ of the your example utility function and explain if this newly gener ated function represents the original preferences. Further, provide clear arguments supporting or rejecting the claim that "f(U(x1, x2)) must be strongly increasing in (x1, x2)."
In financial matters, the utility function estimates the government assistance or fulfillment of a shopper as a function of the utilization of genuine merchandise, like food or dress. The utility function is broadly utilized in reasonable decision hypotheses to examine human conduct. In case you are given a utility function U(x,y), it is not difficult to infer a given impassion bend from it: basically plot all focuses (x,y) to such an extent that U(x,y) approaches a steady. This is a utility function wherein the customer esteems x as much as a/b units of y.
Step by step
Solved in 2 steps with 1 images
