Intermediate Microeconomics and Its Application 11th Edition by Walter Nicholson,Christopher Snyder

Exercise 1

The theory of utility maximization implies that the relationship between a person's income and the amounts of goods he or she buys will be determined solely by his or her preferences. How would the relationship between income and house purchases look in the following circumstances?
1. The person's MRS of housing for other goods is the same along any ray through the origin of the indifference curve map (that is, along a line where the ratio of other goods to housing is fixed).
2. The person's MRS of housing for other goods follows the pattern in question 1 until housing reaches a certain "adequate" level, and then the MRS becomes zero.