User Account

All Pages

How do you determine if a utility function is homothetic

Assignment Help Business Economics
Reference no: EM131438993

How do you determine if a utility function is homothetic? I understand that definitions say that if the MRS depends only on the ratio of the two goods, then the utility function is homothetic. Yet I have trouble understanding how to actually apply this definition. So A is indifferent between bundles satisfying:

(Y/K)+ln(X/K)=2 where X, Y >0 and (X, Y are the goods)

is this utility function homothetic? if so, why?

Reference no: EM131438993

Questions Cloud

What are the advantages and disadvantages of mediation : What are the advantages and disadvantages of mediation? Is it likely to be successful? Is it likely to make the parties more or less hostile toward one another? How do the costs in terms of time and money compare with litigation?
How effectively they can be used to cope with the event : Which of the following cultural adaptations might produce a culture that would be described as a "mosaic"?The segregation practiced in areas of the United States until the 1960s as well as apartheid, that was policy in South Africa until recent tim..
What is the elasticity of supply : The equation for a supply curve is . What is the elasticity of supply as price rises from 3 to 4? What is the elasticity of supply as the price rises from 7 to 8? Would you expect these answers to be the same? Why/ why not? (Taylor & Greenlaw, 201..
Difference between recessionary gap and inflationary gap : Explain the difference between recessionary gap and inflationary gap. Discuss how a "conservative" and a "liberal" might differ in the types of policies they advocate to counteract a recessionary gap
How do you determine if a utility function is homothetic : How do you determine if a utility function is homothetic? I understand that definitions say that if the MRS depends only on the ratio of the two goods, then the utility function is homothetic. Yet I have trouble understanding how to actually apply..
What is the market clearing price : Assume that Lexar and Corsair act as perfectly competitive firms and that Chinesegoods flow freely into the United States. Draw the aggregate (e.g. including all firms)supply curve for this industry in the space below. What is the market clearing ..
Persuasion to persuade consumers about their brands : This concept relates to instrumental conditioning and the fact that each time a behavior occurs it is reinforced. When it comes to purchases that are high involvement purchases, marketers should use the ____ to persuasion to persuade consumers about ..
Resulting full economic price : Suppose market demand and supply are given by Qd = 100-2P and Qs =5+3P. If a price ceiling of $15 is imposed, what will be the resulting full economic price?
Wirte a research paper on a topic of psychopharmacology : Throughout this course, you will write a research paper on a topic related to psychopharmacology and addictions.First, choose a topic you are interested in for your research paper. The topic can be from any topic covered in the course.Submit your ..

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd