A Person with a Quasilinear Utility Function Will

question 21

Multiple Choice

A person with a quasilinear utility function will

• A)have a price elasticity of demand equal to zero for some goods.
• B)have an income elasticity of demand equal to one for some goods.
• C)necessarily consume zero quantity of some good.
• D)necessarily consume positive amounts of every good.
• E)none of the above.

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Definitions:

Average Fixed Costs

The constant production costs (unaffected by changes in output) divided by the production volume.

Swords

Swords are bladed weapons used historically and today for ceremonial, martial, or symbolic purposes, characterized by long blades for slashing or thrusting.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the quantity of output produced.

AFC

Average Fixed Cost, which is the fixed costs of production divided by the quantity of output produced; a measure of economies of scale.