高级微观经济学Utility maximization推荐.ppt

Advanced Microeconomicslecture 5:consumption theory II Ye Jianliang Utility maximization Content: Utility function Utility maximization Expenditure minimization Relationship between UMP and EMP Integrability 1.From preferences to utility Definition: is a utility function of preference , if Can we always find a utility function of ? Maybe If X is finite, there always exist utility function. Proposition1: only rational can be represented by a utility function. (N.C not S.C) Lexicographic preference: rational but no utility function exist. 1.From preferences to utility Continuity: then ,or x upper contour sets and lower contour sets are closure. Proposition2:If is continuous, then exist a continuous utility function representing . 1.From preferences to utility Desirability: preference is desirable if is monotone: is local non-satiation: there is a proposition3: is strong monotone, then it’s monotone; is monotone, it’s local non-satiation. 1.From preferences to utility Convexity: x upper contour sets are convex. Decreasing in marginal rate of substitution. people like variety. Preferences are convex means utility function is quasi-concave. Note: quasi-concave does not contain concave. 1.From preferences to utility If , then are homothetic. Proposition4: The are homothetic if and only if it’s utility function is HD1. If then are quasi-linear of commodity 1(it’s called standard commodity) Proposition5: are quasi-linear if and only if it’s utility function is Gorman form 1.From preferences to utility 2.Utility maximization Consumer’s problem (UMP): The solutions are called Walras’ Demand Correspondence, or function if it’s single point. 2.Utility maximization Properties of HD0 Satisfied Walras