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PROBLEM2

This document is a problem set for Economics 6090, taught by Professor David Easley at Cornell University, due on September 18, 2015. It includes various problems related to revealed preference theorem, demand functions, and preferences in a two-good economy. Specific problems are numbered and referenced for completion by students.

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Nahim Zahur
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3 views

PROBLEM2

This document is a problem set for Economics 6090, taught by Professor David Easley at Cornell University, due on September 18, 2015. It includes various problems related to revealed preference theorem, demand functions, and preferences in a two-good economy. Specific problems are numbered and referenced for completion by students.

Uploaded by

Nahim Zahur
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Economics 6090 Professor David Easley

Fall 2015 Cornell University

Problem Set #2

DUE September 18 in TA Section

1. In the version of the revealed preference theorem given in class we required the choice structure to
include all subsets of the set of alternatives. The proof of this theorem actually only uses subsets of
three or fewer elements and Proposition 1.D.2 in the textbook states the theorem for this case. Is the
theorem true for a smaller class of subsets? In particular, is it true if the choice structure does not
include some three element sets?

2. Problem 2.E.2.

3. Problem 2.E.8

4. Problem 2.F.3.; for parts (b) and (c) assume that the weak axiom is satisfied.

5. Problem 2.F.4

6. A consumer in a two good economy has a demand function that is homogenous of degree 0, satisfies
Walras Law and satisfies the Weak Axiom. You know the entry s11 ( p, w) from his Slutsky matrix.
Can you infer the other entries in the Slutsky matrix?

7. Problem 1.B.3

8. Suppose the concave function U : L


  1
represents preferences on L
 . Prove that the
preferences are convex.

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