What is optimal choice of consumer according to behavior, Microeconomics

Assignment Help:

What is optimal choice of consumer according to consumer behavior?

Consumer's Optimal Choice:

In the fundamental problem of preference maximization, the set of affordable options is just the set of all bundles which satisfy the consumer's budget constraint. It is the problem of preference maximization can be illustrated as:

max u(x)

as like  px < m

x is in X.

There will existence a solution to such problem when the utility function is continuous and which the constraint set is bounded and closed.

The constraint set is exactly closed. When pi > 0 for i = 1, ..., k and m > 0, this is not complicated to demonstrate that the constraint set will be bounded. When some price is zero, the consumer might wish for an infinite amount of the equivalent good.


Related Discussions:- What is optimal choice of consumer according to behavior

Elasticity deman, use the concept of the income elasticity of demand to exp...

use the concept of the income elasticity of demand to explain the difference necessities, luxuries and inferior goods

Determine the oldest ideas in economics, Determine the oldest ideas in econ...

Determine the oldest ideas in economics One of the oldest ideas in economics is that increases in technology certainly run into natural resource scarcity and so lead to increas

Draw demand curve, Suppose that the following equation characterizes the de...

Suppose that the following equation characterizes the demand for primary education in a developing country X: Q = 100 – 2P Where Q is quantity demanded in years of schooling and

Explain about the integrability problem, Explain about the integrability pr...

Explain about the integrability problem. The Integrability Problem: Provide a system of demand functions x(p, m). Is there essentially a utility function by which such deman

Macro, supply and demand

supply and demand

Supply and demand, During the 1990s, technological advance reduced the cost...

During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use of supply and demand diagrams, how the following markets are affected in terms of

Determine the benefits of increased openness in trade, The benefits of incr...

The benefits of increased openness in trade. Narrowly defined, trade openness is lowering trade barriers - facilitating increased imports - whereas focusing on international ex

Structure of the imf, Structure of the IMF: The Central office of the ...

Structure of the IMF: The Central office of the IMF is in Washington DC, USA. It has 184 members. It is affiliated to the UNO. The highest authority of the IMF is the Board of

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd