Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
4Activity
0 of .
Results for:
No results containing your search query
P. 1
The Utility Maximisation Problem

The Utility Maximisation Problem

Ratings: (0)|Views: 161 |Likes:
Published by hishamsauk

More info:

Published by: hishamsauk on Mar 21, 2011
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PPT, PDF, TXT or read online from Scribd
See more
See less

12/16/2012

pdf

text

original

 
A
DVANCED
M
ICROECONOMIC
T
HEORY
 
U.
M
.P:
A
SS
U
M
P
TIONS AND
N
OTATION
Commodities:
L Commodities.
Identical commodities indifferent times/locations
must be viewed as distinct
(b
read in the US and
b
read inthe UK).
Consumption Bundles:
x and y
(w
hich can
b
evectors), are
b
oth mem
b
ersof the
Co
nsumpti
o
n set X
(
all physically possi
b
leconsumption
b
undles).
X is asubset of the L-dimensional real numbers (inc. 0).
L
Ryx

,
yyxx
LL
¹¹¹º¸©©©ª¨¹¹¹º¸©©©ª¨
//
11
 
U.
M
.P:
A
SS
U
M
P
TIONS AND
N
OTATION
P
rices:
A
ssume ex
og
en
o
usly set prices.
R
epresented
b
y a price vector p,
w
hich is a mem
b
er of the real positivenum
b
ers.
P
i
> 0, for all i.
Budget Set:
T
w
o conditions:
Ph
ysical Feasibility
Aff 
o
rdability.
F
easi
b
ility has already
b
eendetermined
b
y the consumption
b
undles.
Afforda
b
ility conditioned
b
y the pricevector x consumption
b
undle. Theyhave to
b
e less than or equal to a set,non-negative level of 
w
ealth 
w
.
ipppp
iL
"¹¹¹º¸©©©ª¨!
0
/
e
!
Rww
pxxpxppx
LL
.
11

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->