In a 2-good model, suppose that all individuals have tastes that are quasilinear in either good 1 or in good 2 (with some of each represented in the group.) The quasilinearity of everyone's tastes is then sufficient to insure that we can treat the group as if it were a single representative consumer.

Question

Quizplus · Accepted Answer

Quasilinearity in preferences means that utility is linear in one of the goods, but this does not ensure that individuals with different quasilinear preferences (in different goods) can be aggregated into a single representative consumer without loss of generality. The aggregation into a representative consumer typically requires more stringent conditions, such as identical preferences or homothetic preferences, which are not guaranteed by quasilinearity alone.

In a 2-Good Model, Suppose That All Individuals Have Tastes