Demand with quasilinear preferences

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Комментарии
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hi, i am from pakistan watching your lectures regularly. please solve the example "compensating and equivalent variation for quasilinear preferences" in chapter 14 of consumer surplus in varian book, along with diagram.

marifkhan
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I was understanding it well except for the final part ..
"The income offer curve is vertical if M large enough so they can afford x1 star units of good 1
The Engel curve for good 1, with income in the Y axis and the Demand for good 1 on the X axis, will also be vertical if income is large enough to allow for cumsuption of X1 star
The demand for good 1 is X1 star independent of income if income is high enough."
Maybe I'll have to check on that again later ..

Bejunckt
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Incredibly clear and to the point. Thank you.

gagarine
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Could you make some explanation writen, so that we can see it more directly and easier for us to comprehend

jackeylee
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1:15 aren’t indifference curves vertical translations of each other and not horizontal?

raihankhan
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