problem code:080609MICRO

Posted by vishruti on Jun 08, 2009; 1:00pm
URL: http://discussion-forum.276.s1.nabble.com/problem-code-080609MICRO-tp3042787.html

Let the utility function be u(x1 , x2) = (x1 - a1)^b1 (x2 - a2)^b2 where a's and b's are positive constants. Determine the slope and the curvature of the utility funcion . Under what condition will they represent well behaved prefrences ( downward sloping and convex to the origin) ?