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Microeconomics homework question-proving that a good is normal

  1. May 30, 2012 #1
    Hey,
    I need help with the following question in microeconomics:
    A consumer lives in a world of two goods: computers and money. Let x be the number of computers,the consumer can buy.
    [itex]x\epsilon [0,1,2,3][/itex]
    The consumer has the following preference relation: If the consumer has money and no computers, he is willing to spend at most half of his money on buying a single computer. If the consumer has 1 computer, he is willing to spend 1/3 of his money on buying a second computer. If the consumer has 2 computers, he is willing to spend 1/4 of his money on buying a third computer.

    A. Explain why [itex] (0,M)[/itex]~[itex](1,\frac{M}{2})[/itex]~[itex](2,\frac{M}{3})[/itex]~[itex](3,\frac{M}{4})[/itex]

    B.Explain why the consumer's preference relation can be represented the following utility function [itex]U(x,M)=(x+1)M[/itex].

    C.Prove that computer is not an inferior good

    I have managed to solve A,B , however I need help in C.
     
  2. jcsd
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