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Math Help - Economics Question

  1. #1
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    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. #2
    GAMMA Mathematics
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    Is g(-) the first derivative of g, the opposite of g, or just g?
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  3. #3
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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 04:50 PM.
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  4. #4
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    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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