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A utility maximising individual has utility function u(x,y) = x'/2y3/4, income m = 100 and faces prices Px = 4 and py = 1. Suppose the price of x decreases to px (i) The own-price income effect is 15.0 (1 d.p.). (ii) The own-price substitution effect is 11.2 (1 d.p.). (iii) The cross-price income effect is 27.2 (1 d.p.). (iv)All of the above are correct. (v) None of the above are correct. = 1. Which of the following statements is correct?

A utility maximising individual has utility function u(x,y) = x'/2y3/4, income m = 100 and faces prices Px = 4 and py = 1. Suppose the price of x decreases to px (i) The own-price income effect is 15.0 (1 d.p.). (ii) The own-price substitution effect is 11.2 (1 d.p.). (iii) The cross-price income effect is 27.2 (1 d.p.). (iv)All of the above are correct. (v) None of the above are correct. = 1. Which of the following statements is correct?

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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QUESTION 5 A utility maximising individual has utility function u(x,y) = x1/2y3/4, income m = 100 and faces prices px 4 and py = 1. Suppose the price of x decreases to p, = 1. Which of the following statements is correct? (i) The own-price income effect is 15.0 (1 d.p.). (ii) The own-price substitution effect is 11.2 (1 d.p.). (iii) The cross-price income effect is 27.2 (1 d.p.). (iv)All of the above are correct. (v) None of the above are correct.
Transcribed Image Text:QUESTION 5 A utility maximising individual has utility function u(x,y) = x1/2y3/4, income m = 100 and faces prices px 4 and py = 1. Suppose the price of x decreases to p, = 1. Which of the following statements is correct? (i) The own-price income effect is 15.0 (1 d.p.). (ii) The own-price substitution effect is 11.2 (1 d.p.). (iii) The cross-price income effect is 27.2 (1 d.p.). (iv)All of the above are correct. (v) None of the above are correct.
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