ECO 2023 Lecture Notes - Lecture 11: Budget Constraint, Algebraic Expression, Utility
Document Summary
Suppose a consumer"s utility function is u = x0. 5y0. 5. It follows that the indifference function associated with the bundle x = 2 and y = 2 or (2, 2) is: Consider an individual whose utility function is u = x0. 5y0. 5. If the individual consumes 4 units of x and. 4 units of y, then she will experience some level of utility. A consumer exhausts her income on goods x and y. If her income is , the price of good x is px = , and the price of good y is py = , then the algebraic expression for her budget constraint is: Suppose a quantity discount applies on purchases of a good. Specifically, the pricing arrangement is such that a consumer can purchase the first 30 units of the good for each and all additional units (i. e. , the. 31st, 32nd, etc. ) can be purchased for each.
