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Quasilinear Note PW
Quasilinear Note PW
Parag Waknis
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Parag Waknis (Ambedkar University Delhi) Quasilinear August 22, 2019 1 / 11
Overview
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Intuition
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Intuition
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Parag Waknis (Ambedkar University Delhi) Quasilinear August 22, 2019 4 / 11
Definition
In its general form, preferences that are quasilinear are written as follows:
u(x1 , x2 ) = v(x1 ) + x2
x2 = u(x1 , x2 ) − v(x1 )
They are just shifted versions of each other. The following graph gives the
representation of these preferences.
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Quasilinear Indifference Curves
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Quasilinear Indifference Curves
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Demand with Quasilinear Preferences
Solution:
p1
⇒ v′ (x1 ) =
p
( )2
p 1
⇒ x1 ∗ = v′−1
p2
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Additive Separability and Quasilinear Preferences
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Parag Waknis (Ambedkar University Delhi) Quasilinear August 22, 2019 10 / 11
The End
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