Chapter Questions
Distinguish individual Engel curves from historical Engel curves.
Explain why concave indifference curves cause discontinuities in demand 'functions' (an imprecise term in this case, why?).
Why is the Jacobian of the Hicksian demand function called Slutsky matrix? (First at least read exercise 31)
Define homothetic utility functions.
Discuss the likelihood of Giffen goods.
The Walrasian UMP can produce cases where demand for a good increases when the price of the good increases, and yet the good is not Giffen, because not inferior. Explain.
Explain the qualification to the statement that with quasi-linear utility all indifference curves are parallel translations of one of them.
Draw - Fig. 4.26 bis and illustrate the kind of workers' behaviour that can justify it.
Which axiom about revealed preferences does not assume that demand is single-valued?
List the conditions required for the reconstruction of preferences from observed choices.
Attempts at econometric estimation of systems of market demand functions that do not satisfy WAM need not postulate functional forms that guarantee that the Slustsky matrix is negative semidefinite. Why?
Enunciate the Eisenberg theorem.
The definition of general equilibrium of pure exchange in $>$ Sect. 4.22 does not specify that if in equilibrium in some market there is excess supply, the price in that market must be zero. Why is it superfluous to specify it?
With strongly monotonic preferences, exchange-equilibrium prices are all positive. Why?
Show that convex preferences by themselves do not suffice to guarantee convex indifference curves.
Why do textbooks nearly always assume internal optimal consumption baskets?
Prove that the expenditure function is concave.
Explain why the qualification 'in which price is positive' is important to a correct statement of Walras' Law
How can one recover the utility function from the expenditure function?
Show that without convexity of indifference curves, demand functions can have discontinuities.
Explain why Debreu's definition of the consumption set appears to exclude the possibility of default on contracts in futures.
Explain why the thesis, that the labour supply curve is necessarily increasing as w starts rising from zero, can be criticized.
Produce an Edgeworth box in which points of tangency between indifference curves of the two consumers are not in the Pareto set.
What is the addition the SARP makes relative to the WARP?