Consider the following utility functions:a) U= xyb) U=(xy)l3c) U=min(x,y/2)d) U=2x + 3ye) U=x?y? + xy1. Check if any of utility functions a) – e) are homogeneous. If so, state the degreeof homogeneity of each.

the utility function measures the welfare or satisfaction of a consumer as a function of the…

Answered: a) U= xy b) U= (xy)3 c) U=min(x,y/2) d)…

a) U= xy b) U= (xy)3 c) U=min(x,y/2) d) U= 2x + 3y e) U=x?y² + xy 1. Check if any of utility functions a) – e) are homogeneous. If so, state the degree of homogeneity of each.

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Chapter1: Making Economics Decisions

Section: Chapter Questions

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Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

Consider the following utility functions:
a) U= xy
b) U=(xy)l3
c) U=min(x,y/2)
d) U=2x + 3y
e) U=x?y? + xy
1. Check if any of utility functions a) – e) are homogeneous. If so, state the degree
of homogeneity of each.

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