An Individual Derives Utility from Consuming "All Other Goods," G,and

question 76

Multiple Choice

An individual derives utility from consuming "all other goods," g,and clean air (measured by the reduction in particulate matter per m³) ,a,as measured by the utility function U(g,a) = g^0.6a^0.4.The price of consumer goods equals $20 and the price of clean air (abatement) equals $10.What is the slope of the Engel curve when income increases from $100 to $200?

• A) The slope is 25.
• B) The slope is -25.
• C) The slope is zero.
• D) The slope is infinite.

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Definitions:

1955

The year 1955 is notable for several historical events, including the Montgomery Bus Boycott, which marked the beginning of the civil rights movement in the United States.

Japan's Reconstruction

The period following World War II in which Japan underwent significant political, economic, and social transformation, led by both Japanese leaders and the Allied occupation.

Second World War

A global conflict that lasted from 1939 to 1945, involving most of the world's nations and marked by significant battles across Europe, Africa, Asia, and the Pacific.

United States

A country in North America founded on July 4, 1776, known for its federal system of government and its role as a leading global economic and military power.