ECON 11 Study Guide - Midterm Guide: Peanut Butter, Indirect Utility Function, Utility
Document Summary
Graphically explain the e ect in the budget constraint of an increase in an individual"s income without changing relative prices. Explain the impact on the quantity demanded of both goods. Explain the monotonicity and convexity axioms and their implications for the shape of the indi erence curves. Suppose that the consumers demand for x1, as a function of its own price p1, the price of the other good p2 and income m is given by: x . 1(p1, p2, m) = m p1 + 2p2. Thomas likes hamburgers and pizza and views them as perfect substitutes. Each hamburger costs and each slice of pizza costs . What does thomas consume: this week there is a promotion in northern lights and you can buy each slice of pizza for. What does thomas consume: during the promotion in northern lights, the hamburger store at lu valle wants to attract clients like thomas.
