Question: Suppose a consumer has the following utility function u ( x 1 , x 2 ) = 2 x 1 x 2 2 ( x
Suppose a consumer has the following utility function
Let the price vector and the consumer's income
i Clearly, is continuous so that it represents a preference relation Is locally insatiable? If yes, prove it If no explain the reason.
ii Is a concave function for all If yes, prove it If no explain the reason.
iii Find the Marshallian demand function and indirect utility function
iv Verify that and are homogeneous of degree in
v Verify that the two goods are superior.
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