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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