Suppose an individual only consumes two goods, X and Y. Which of the following statements is true? O a. Marshallian demand for X and Y are homogenous of degree zero in prices. O b. Indirect utility is homogenous of degree zero in prices. Oc. When X and Y are both normal goods, the consumer has constant expenditure shares for both goods. O d. Marshallian elasticity ep, is more negative than Hicksian elasticity ep. when X is a normal good. Clear my choice

Suppose an individual only consumes two goods, X and Y. Which of the following statements is true? O a. Marshallian demand for X and Y are homogenous of degree zero in prices. O b. Indirect utility is homogenous of degree zero in prices. Oc. When X and Y are both normal goods, the consumer has constant expenditure shares for both goods. O d. Marshallian elasticity ep, is more negative than Hicksian elasticity ep. when X is a normal good. Clear my choice

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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

Suppose an individual only consumes two goods, X and Y. Which of the following statements is true?
O a. Marshallian demand for X and Y are homogenous of degree zero in prices.
O b. Indirect utility is homogenous of degree zero in prices.
Oc. When X and Y are both normal goods, the consumer has constant expenditure shares for both goods.
O d. Marshallian elasticity ep, is more negative than Hicksian elasticity en, when X is a normal good.
Clear my choice
Which of the following functions is not homothetic?
O a. f(x, y) = log x + y
O b. f(x, y) = xA y314
O c. f(x, y) = log x +2 log y
O d. f(x, y) = x2 y/2
Clear my choice

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