Which of the Following Utility Functions Represent Preferences of a Consumer

question 7

Multiple Choice

Which of the following utility functions represent preferences of a consumer who does not have homothetic preferences?

• A) U(x, y) = xy.
• B) U(x, y) = x + 2y.
• C) U(x, y) = x + y^.5.
• D) U(x, y) = min{x, y}.
• E) More than one of the above.

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Definitions:

Exert Pressure

Applying force or influence to achieve a specific outcome or change.

Old Price

Refers to the price level of a good or service in the past, before any adjustments like inflation, discounts, or changes in market conditions.

Surplus

An excess of production or supply over demand, often leading to lower prices.

Shortage

A market condition where the demand for a good or service exceeds its supply at a particular price.