utility function "min"?

i'm given this utility function: min(x,y). I have to "write the consumer's problem in terms of an objective function and a generic budget constraint"

I can think of a generic budget constraint: and that's I = (p1)x + (p2)y. p1 means "p sub 1" and p2 means "p sub 2" and they are the prices for x,y respectively. I is the income.

Now, objective function? What would that mean? And what exactly does min(x,y) mean anyway? does that mean 'minimum'?

thanks for your time

Reply 1

Blondin

The problem is exactly the same as in your previous post. Only the utility function changed (and yes, min is the minimun). Just make a drawing of the indifference curves and the budget consraint, things should look pretty obvious.

As for the objective function, you just need to write down the maximisation problem.

Are you trying to have all your homework done on the forum? I understand you might not understand some concepts and might need help, but you do not seem to put in much effort to do things by yourself.

And I say it again, this is not the forum for this kind of thread : http://www.thestudentroom.co.uk/forumdisplay.php?f=84

Reply 2

always + forever

a min fx means that the two good are perfect complements, and consumed in certain ratio. e.g. 1 sock, 1 shoe.

This means that the utility fx is comprised of two lines, one parallel to the x-axis, and one parallel to the y-axis. it should look like this - L (kind of, anyway, dependent on the x:y ratio)

anyway, the budget constraint hits the corner of this fx: thus "the minimum"

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