Indifference Curves: no Utility? Alex Gheg





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Published on Dec 10, 2011


What does it say if your Professor of Economics cannot answer the following questions? Put your Professor through my challenge, and see the truth unfold.
1. Suppose good X is the high quality good and good Y is the low quality good. Without using any budget lines explicitly or implicitly, can you show the geometry of quality only with indifference curves? Are flat indifference curves merely rigged preferences that get the large desired substitution effect? Would anyone other than an economist talk about 1/2 of a TV?
2. Suppose good X is the convenient good and good Y is the inconvenient good. Can you show the show the geometry of convenience only with indifference curves?
3. Suppose good X is music on blu ray(quality) and good Y is music on iTunes(convenience). Can you show the geometry of the trade off between quality and convenience with the way they were defined from the first two questions, only with indifference curves?
4. Could you show any of the graphs from the first three questions to the other Economics Professors, and have them all identify the concepts that you defined, without your assistance?
5. Gheg used a CES utility function to explore quality and convenience. He claims that it has dominated the literature for many decades, and is never more suitable since he is comparing such similar goods. If it is inappropriate to use this utility function for his examples then when is it suitable to use a CES utility function?
6. If good X is the high quality music on blu ray and good Y is the convenient music on iTunes then can you describe the trade off between quality and convenience using only the parameters of the CES utility function?
7. If it is acceptable to multiply quality with quantity as in some papers then is it acceptable to have "quantity times quality times convenience?"
8. Do quality and convenience have any meaning in a world without prices? Can a quality ladder model make any useful predictions for the behavior of a child that receives an endowment of goods from his or her parents? Can you give any examples?
9. If imaginary quality ladder models are good theory then is it appropriate to incorporate convenience ladders in the model? Is an imaginary ladder an easy fix for all mysteries in economics?
10 . Where has anyone ever mathematically defined quality or convenience in the scholarly literature without merely putting a variable called Q or C in an equation, without any further explanation?
11. Gheg says that quality and convenience dominate our lives. Do you think they are important? Should the ultimate consumer theory tell us what these things are? Do you believe that the standard consumer theory that is taught right now can ever explain these fundamental concepts?
12. Are you willing to post your solutions to these questions on youtube, so they can be seen by your peers around the world?

The One or the Infinite by Alex Gheg

If you liked Richard Wagner's music from the Ring then it's CD 2 track 4

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