微观经济理论测试：ch03.docxVIP

CHAPTER 3PREFERENCES AND UTILITY These problems provide some practice in examining utility functions by looking at indifference curve maps. The primary focus is on illustrating the notion of a diminishing MRS in various contexts. The concepts of the budget constraint and utility maximization are not used until the next chapter. Comments on Problems This problem requires students to graph indifference curves for a variety of functions, some of which do not exhibit a diminishing MRS. Introduces the formal definition of quasi-concavity (from Chapter 2) to be applied to the functions in Problem 3.1. This problem shows that diminishing marginal utility is not required to obtain a diminishing MRS. All of the functions are monotonic transformations of one another, so this problem illustrates that diminishing MRS is preserved by monotonic transformations, but diminishing marginal utility is not. This problem focuses on whether some simple utility functions exhibit convex indifference curves. This problem is an exploration of the fixed-proportions utility function. The problem also shows how such problems can be treated as a composite commodity. In this problem students are asked to provide a formal, utility-based explanation for a variety of advertising slogans. The purpose is to get students to think mathematically about everyday expressions. This problem shows how initial endowments can be incorporated into utility theory. This problem offers a further exploration of the Cobb-Douglas function. Part c provides an introduction to the linear expenditure system. This application is treated in more detail in the Extensions to Chapter 4. This problem shows that independent marginal utilities illustrate one situation in which diminishing marginal utility ensures a diminishing MRS. This problem explores various features of the CES function with weighting on the two goods. 6 ? Solutions ManualSolutionsHere we calculate the MRS for each of these functions:a. MRS = fx/ fy =3/1 一 MRS