Question: 3. Prove that the set 3(1),!) = {x E R2:p1x1 +p2x2 + +pnsrn S I,wherep >> 0] is a convex set. Here, 11 >> I]

 3. Prove that the set 3(1),!) = {x E R2:p1x1 +p2x2

+ +pnsrn S I,wherep >> 0] is a convex set. Here, 11

3. Prove that the set 3(1),!) = {x E R2:p1x1 +p2x2 + +pnsrn S I,wherep >> 0] is a convex set. Here, 11 >> I] means 19,- > {1 for all i. Hint: B(p, 1) contains all affordable bundles at prices p and income 1. Suppose the bundles (xx', ...,x,'1) and (xix; , 3:3,) are in B(p, I). Then we need to show that a convex combination ofthese bundles is also a member of B(p, I)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!