Demand Functions Are "Homogeneous of Degree Zero in All Prices

question 36

Multiple Choice

Demand functions are "homogeneous of degree zero in all prices and income." This means

• A)a proportional increase in all prices and income will leave quantities demanded unchanged.
• B)a doubling of all prices will not alter consumption decisions.
• C)prices directly enter individuals' utility functions.
• D)an increase in income will cause all quantities demanded to increase proportionately.

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