An Individual Derives Utility from Games,g (Y-Axis),and Toy Airplanes,a (X-Axis),described

question 80

Multiple Choice

An individual derives utility from games,g (y-axis) ,and toy airplanes,a (x-axis) ,described by the utility function U(g,a) = g^0.6a^0.4.The price per game is $20 and the price of toy airplanes is $10.Using the slope of the income consumption curve (ICC) ,determine whether games and toy airplanes are normal or inferior goods when income increases from $100 to $200.

• A) Both goods are normal goods with an ICC slope of .
• B) Both goods are normal goods with an ICC slope of .
• C) Both goods are inferior goods with an ICC slope of - .
• D) Both goods are inferior goods with an ICC slope of - .

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