A Consumer Has a Utility Function of the Form U(x

question 24

Essay

A consumer has a utility function of the form U(x, y) =x a + y b, where both a and b are nonnegative. What additional restrictions on the values of the parameters a and b are imposed by each of the following assumptions?
a. Preferences are quasilinear and convex, and x is a normal good.
b. Preferences are homothetic.
c. Preferences are homothetic and convex.
d. Goods x and y are perfect substitutes.

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Definitions:

Social Dilemma

Situations in which personal interests are at odds with the collective good, challenging the harmony between individual actions and group welfare.

Commons Dilemma

A situation in which individuals’ short-term selfish interests are at odds with long-term group benefits, leading to potential resource depletion.

Common Law

Common Law is a legal system based on judicial decisions and precedents rather than written laws or statutes.

Dismissed

A legal term referring to a court's decision to terminate a case without further hearing, either for lack of grounds or upon resolution before trial.