The utility function is
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4 marks, −1MicroeconomicsConsumer preferences and utilityUtility functions and monotonic transformationsModerateabout 2 min
JNU SIS 2011 Question 25: Consumer preferences and utility
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Plain-text version
The utility function U(x) = (x^α - 1)/α; 0 < α ≤ 1; x ∈ R₊ is (A) concave and increasing (B) convex and increasing (C) concave and decreasing (D) convex and decreasing
Also written as: The utility function U(x) = (x^(alpha) - 1)/alpha; 0 < alpha <= 1; x in R_+ is
Consumer preferences and utility has come up 93 times in 7 exams since 2007.
What this question tests
This question is on Utility functions and monotonic transformations, part of Consumer preferences and utility in Microeconomics.
How ordinal utility represents preferences, and why any monotonic transformation of a utility function represents the same ones.
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