We consider a two good world where an individual i with income mi has utility function u (x, y), where x ? [0, ?) and y ? {0, 1}. We first derive the valuation (maximum price that he is willing to pay for the object) for good y as a function of his income. Then we consider the following problem....

We consider a two good world where an individual i with income mi has utility function u (x, y), where x ∈ [0, ∞) and y ∈ {0, 1}. We first derive the valuation (maximum price that he is willing to pay for the object) for good y as a function of his income. Then we consider the following...

We consider a two good world where an individual i with income mi has utility function u (x, y), where x element of [0, ∞) and y element of {0, 1}. We first derive the valuation (maximum price that he is willing to pay for the object) for good y as a function of his income. Then we consider...