5.10 Suppose the individuals utility function for three goods, X1, X2, and X3, is separable; that is,
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5.10 Suppose the individual’s utility function for three goods, X1, X2, and X3, is “separable”; that is, assume that U(X1, X2, X3) U1(X1) U2(X2) U3(X3)
and U i 0 U i 0 for i 1, 2, or 3.
Show that
a. None of the goods can be inferior;
b. Xi/Pi must be 0.
In the Chapter 6 extensions we examine this separable utility case in more detail.
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Related Book For
Microeconomic Theory Basic Principles And Extensions
ISBN: 9780324270860
9th Edition
Authors: Walter Nicholson
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