U = X^2 + y are preferences strongly monotonic?
U = X^2 + y are preferences strongly monotonic?
Homework Answers
Yes. Monotonic preferences means that more of a good always gives consumer higher satisfaction.
U = X2 + Y
As X increases, U will increases.
As Y increases, U will again increase.
So, increase in X and Y gives the consumer high satisfaction. Thus,
more of both goods is preferred to less. So, the given preferences
are strictly monotonic.
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α1-α Given prices (P1 and p2) and income (Y), we know from lecture that if preferences can be represented by the Cobb-Douglas utility function u (q1,22 for 0< α< 1, then the demand for goods 1 and 2 are (1-a)Y P2 q1-- and q2 = P1 We also know that any monotonic transformation of utility represents the same preferences. Consider the monotonic transformation v (q1.q2,-In(u (442),-InG In q192 qq As was shown in lecture, by the rules of logarithms this...
ots) Mark has preferences that can be represented by the following utility function: U(x,y)= (18+x)(+1). Sarah's utility function is v) 6x +60 y - 4x + 2xy - 24 y +29: Do Mark and Sarah have the same preferences? You must prove your answer. U (x, y) = 6x+60 y - 4x + 2
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