Give arguments in favor of against the following statements. a) In case of two goods model, convexity holds if and only if commodities are complements and their marginal utilities are diminishing b) All commodities in the consumption bundle of consumer can neither be inferior nor luxury c) Quasi concavity of utility function is a consequence of convexity axiom on consumer preferences. On the other hand, quasi-convexity of indirect utility function needs no assumption to be imposed on consumer preferences.

Give arguments in favor of against the following statements. a) In case of two goods model, convexity holds if and only if commodities are complements and their marginal utilities are diminishing b) All commodities in the consumption bundle of consumer can neither be inferior nor luxury c) Quasi concavity of utility function is a consequence of convexity axiom on consumer preferences. On the other hand, quasi-convexity of indirect utility function needs no assumption to be imposed on consumer preferences.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter3: Preferences And Utility

Section: Chapter Questions

Problem 3.2P

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