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:

Electrical Charge

A fundamental property of matter that causes it to experience a force when placed in an electromagnetic field.

Neuron

A cell in the nervous system that transmits information to other nerve cells, muscles, or gland cells.

Cell Body

The spherical part of a neuron that contains the nucleus and connects to the dendrites and the axon.

Nucleus

The central part of an atom containing protons and neutrons or the control center of a cell containing the cell's DNA.