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Old December 10th, 2007, 11:59 AM
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Default Economics Question

Anybody have any idea how I should approach this (what to look for in books etc), I've missed loads of uni and dont know where to start:

Consider 2 consumers. One has utility function u( X1, X2) and the other has utility function g(u( X1, X2)) where g(-) is a monotonic increasing function. Show that the consumers have the same demand functions.


Any suggestions much appreciated
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  #2  
Old January 3rd, 2008, 07:01 AM
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Is g(-) the first derivative of g, the opposite of g, or just g?
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Old October 7th, 2008, 06:22 PM
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Exclamation Microeconomics help!!--any econ major??

Defend or refute the following statements:

a. "If the income and substitution effects of a rise in the price of a good both cause consumption of the good to fall, the good is inferior"
b. "A peasant farmer allocates his entire budget to two goods; rice and beans. If rice is an inferior good."
c. "Increases in interest rates increase the utility of net savers, but decrease the utility of net borrowers.

Also,

Both persons A and B, have identical preferences, and identical wage rates. A has no non-labor income, but B receives a non-labor income (husband's pension). Assuming that leisure is a normal good, who will work more hours??

Thanks so much!!

Last edited by GoTerps; October 8th, 2008 at 06:50 PM.
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Old October 9th, 2008, 08:52 PM
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Default look for reply where u posted these questions separetly

Quote:
Originally Posted by GoTerps View Post
Defend or refute the following statements:

a. "If the income and substitution effects of a rise in the price of a good both cause consumption of the good to fall, the good is inferior"
b. "A peasant farmer allocates his entire budget to two goods; rice and beans. If rice is an inferior good."
c. "Increases in interest rates increase the utility of net savers, but decrease the utility of net borrowers.

Also,

Both persons A and B, have identical preferences, and identical wage rates. A has no non-labor income, but B receives a non-labor income (husband's pension). Assuming that leisure is a normal good, who will work more hours??

Thanks so much!!
look for your original post. i posted the answer there.
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