When does benefit per baht lead to a corner or a kink?
Preference shape determines the solution rule, so tangency cannot be imposed everywhere.
Follow the cause and effect
Identify straight, L-shaped, or smooth indifference curves.
For substitutes, buy the good with higher utility per baht.
For complements, impose the kink ratio and combine it with the budget.
The model you are using
Conditions for this model
Nonnegative purchases, no minimum purchase requirement, and the stated preferences.
The exam trap
MRS need not equal relative prices at a corner and is undefined at a kink.
Connect the reasoning to the graph
What changes
- Straight curves often select a budget endpoint; L-shaped curves select the highest affordable kink.
What stays fixed
Nonnegative purchases, no minimum purchase requirement, and the stated preferences.
Keep these conditions throughout the comparison; change only what the case above specifies.
What to inspect
For complements, impose the kink ratio and combine it with the budget.
Compare before and after, and locate the conclusion on the graph.
5 MINUTES · TRANSFER THE IDEA
Can you explain it without the lesson?
Compare choices for U=3x+y and U=min{x,2y} under one budget.