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Questions › DSE › DSE 2010 › Q18
1 markMicroeconomics › Consumer preferences and utility › Perfect substitutes, complements and lexicographic preferencesModerateabout 3 min

DSE 2010 Question 18: Consumer preferences and utility

Suppose there are just two goods, x1x_{1}x1​ and x2x_{2}x2​. A consumer chooses x2=0x_{2}=0x2​=0 for all income levels w>0w>0w>0 and all prices p1>0,p2>0p_{1}>0,p_{2}>0p1​>0,p2​>0. These choices are consistent with the consumer

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Suppose there are just two goods, x₁ and x₂. A consumer chooses x₂=0 for all income levels w>0 and all prices p₁>0,p₂>0. These choices are consistent with the consumer (A) having utility function u(x₁,x₂)=x₁+2x₂ (B) having utility function u(x₁,x₂)=2x₁+x₂ (C) lexicographically preferring x₂ to x₁ (D) lexicographically preferring x₁ to x₂

Also written as: Suppose there are just two goods, x_1 and x_2. A consumer chooses x_2=0 for all income levels w>0 and all prices p_1>0,p_2>0. These choices are consistent with the consumer

Consumer preferences and utility has come up 93 times in 7 exams since 2007.

What this question tests

This question is on Perfect substitutes, complements and lexicographic preferences, part of Consumer preferences and utility in Microeconomics.

Preferences that give straight-line, L-shaped or dictionary-ordered indifference sets, and how they differ from standard ones.

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Practise Consumer preferences and utilityMore on Perfect substitutes, complements and lexicographic preferences

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Question from the DSE 2010 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.