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Prove Formally That the Rationality Axioms Alone Rule Out the Possibility

question 9

Essay

Prove formally that the rationality axioms alone rule out the possibility of indifference curves crossing.


Definitions:

Future Value

The worth of a current asset on a certain future date, calculated by presuming a specific growth rate over a period.

Deposit Today

An amount of money placed into a financial account or investment at the present time.

Cash

Liquid assets that can be used immediately for transactions, including currency and bank balances.

Compound Interest

Interest computed not only on the original amount invested or loaned but also on the interest that has been added to this principal over past periods.

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