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Consider an agent with preferences over X = Rn representable by the quasilinear utility function U(x) = (min{x1/1, ...,xn1/n1})k xn for some constants k, 1,
Consider an agent with preferences over X = Rn representable by the quasilinear utility function U(x) = (min{x1/1, ...,xn1/n1})k xn for some constants k, 1, ...,n1 > 0. Prices are linear, and the outside good (n) is a numeraire. The agent has wealth w > 0. 1. Suppose that the agent allocates a portion w0 2 [0, w] of her wealth to consuming inside goods (1 through n1) and spends
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