MSc Microeconomics 2016, Tutorial 1

Please do the following exercises in Microeconomic Theory by Mas-Colell, Whinston and

Green.
Exercise 1.B.1

Prove property (iii) of Proposition 1.B.1 (in lecture slides).

Exercise 1.B.2

Prove property (i) and (ii) of Proposition 1.B.1 (in lecture slides).
Exercise 1.C.1

Consider the choice structure (B, C()) with B = ({x, y}, {x, y, z}) and C({x, y}) = {x}.
Show that if (B, C()) satises the weak axiom, then we must have C({x, y, z}) = {x},= {z},
or = {x, z}.
Exercise 2.D.2

A consumer consumes one consumption good x and hours of leisure h. The price of the
consumption good is p, and the consumer can work at a wage rate of s = 1. What is the
consumer's Walrasian budget set?
Exercise 3.B.1

Show the following:

a) If % is strongly monotone, then it is monotone.
b) If % is monotone, then it is locally nonsatiated.
Exercise 3.B.3

Draw a convex preference relation that is locally nonsatiated but is not monotone.