Zero Income Effect on Free Time (Figure 3.12)

General Form of a Quasi-Linear Utility Function

Condition for Convexity in Quasi-Linear Preferences

MRS in Quasi-Linear Preferences Depends Only on the Non-Linear Good

A consumer's preferences for concert tickets (Good X) and all other goods (measured in money, Good Y) are structured in a specific way. For any given number of concert tickets, the consumer's willingness to give up money for one more ticket is the same, regardless of how much money they currently possess. Graphically, this results in indifference curves that are vertical translations of one another. What is the direct implication of this preference structure for the consumer's Marginal Rate of Substitution (MRS)?

Comparing Willingness to Trade

Identifying Preference Structures from Behavior

Consider an individual's preferences for two goods: weekly data allowance (measured in gigabytes) and all other consumption (measured in dollars). If this individual's willingness to give up dollars for an additional gigabyte of data is lower when they have a high income compared to when they have a low income, holding their data allowance constant, then their preferences can be described as quasi-linear.

Park Funding and Consumer Preferences

Match each statement about consumer preferences for two goods (Good X and Good Y, where Y is measured in money) to the preference structure it describes.

Evaluating a Policy Proposal with Specific Preferences

Analyzing the Marginal Rate of Substitution

Two individuals, Alex and Ben, have identical preferences for weekly data usage (measured in gigabytes, GB) and all other goods (measured in dollars, $). Their preferences are quasi-linear, meaning their willingness to pay for an extra GB of data does not depend on how many dollars they have. Currently, Alex has 5 GB of data and $100, while Ben has 5 GB of data and $200. How does Alex's Marginal Rate of Substitution (MRS) of dollars for data compare to Ben's?

Analyzing Consumer Preferences from Indifference Points