Demand with quasilinear preferences

Summary

Quasilinear preferences

• $u\left( x_1,x_2 \right)=v\left( x_1 \right)+x_2$ where $v$ is strictly concave
• With quasilinear preferences, the income offer curve and the Engel curve are vertical for $m$ large enough that $x_2>0$ .
• An increase in income has no effect on the demand for good 1.