Intermediate Microeconomics · free preview
Demands from Special Preferences
Each preference family manufactures its own demand behavior, Cobb-Douglas spends fixed shares, complements race the proportion line to the budget, substitutes race to corners, and quasilinear utility fixes one good's quantity regardless of income.
1. Cobb-Douglas and the fixed budget split
Cobb-Douglas and the fixed budget split
2. Complements and the proportion race
Complements and the proportion race
3. Substitutes head for corners
Substitutes head for corners
4. Quasilinear and the income-proof good
Quasilinear and the income-proof good
5. The complements race
For u equal to min of 2 x1 and x2, income 60, prices 1 and 1, what does the consumer buy?
6. The substitutes rule
For u equal to 2 x1 plus x2 with prices p1 equals 1 and p2 equals 2, where does the consumer land?
7. Quasilinear income immunity
For u equal to ln x1 plus x2 with prices 1 and 1, income rises from 10 to 20. What happens to the demands?
8. Matching family to market
A consumer's purchases of tea and sugar always move together in fixed proportion regardless of prices. Which family fits?
9. Complements demand
For u equal to min of 2 x1 and x2, income 60, prices 1 and 1, compute x1, and write the number.
10. Quasilinear demand
For u equal to ln x1 plus x2 with prices 1 and 1 and income 10, compute x2 at the optimum, and write the number.
11. Complements' payoff
For u of min of 2 x1 and x2 with income 60 and equal prices, the optimum is (20, 40). What utility does it deliver?
12. The linear corner in numbers
For u of 2 x1 plus x2 with income 12 and prices 1 and 2, where does the consumer land?
13. The income-proof good
For u of ln x1 plus x2 with equal prices, income rises from 10 to 20. What happens?
14. Complements after a price cut
For u of min of 2 x1 and x2 with income 60, the price of good one falls to one half. Where is the new optimum?
15. Corner utility
For u of 2 x1 plus x2 with income 12 and prices 1 and 2, compute the optimal utility, and write the number.
16. The complement stretch
With the price of good one at one half, income 60, compute the new x2 at the optimum, and write the number.
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