For the Cobb-Douglas Utility Function with Two Goods,the Sum of the Own

question 13

Multiple Choice

For the Cobb-Douglas utility function with two goods,the sum of the own price elasticities of demand must be

• A)0.
• B)-1.
• C)-2
• D)any number between 0 and -4.

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Definitions:

Economic Modernization

The process by which an economy transforms from primarily agricultural to one based on the manufacturing of goods and services, often involving technological innovation and changes in socio-economic structures.

Constant Growth

A state or condition of a system, such as an economy or a population, where there is a steady increase over time without periods of decline.

Social Atomization

The breakdown of social bonds between an individual and their community or society, leading to isolation or a feeling of disconnection.

Kitty Genovese

A New York woman whose 1964 murder became famous due to reports of bystander apathy, sparking research on what is now known as the bystander effect.