1transitive definition
if A>B and B>C then A>C
2perfect substitutes create a _____
straight line, generally the slope is -1
3perfect compliments creates a ______
a concave right angle, it usually utilizes the minimum function
4max function creates a _____
a convex right angle
5what form does quasi linear come in?
u(x,y)=V(x)+y=x , the v(x) could be a square root
6what form does cobb-douglas come in
u(x,y)=Ax^(a)y^(b)
7how do you make the cobb douglas utility function linear
convert into a ln(x) + b ln(y)
8how do you solve original vs new bundle w missing variable?
1.plug in original x values into utility function and solve for u(x1,x2)
2. plug in u(x1,x2) value from ^ and plug in the single value to solve for the missing var
9how do you find the marginal rate of substitution? u(x1,x2)
1. derive the utility function in terms of x1 and x2 respectively to find MUx1 and MUx2
2. MRS = -(du/x1 (or x) / du/x2 (or y))