Which of the following statements about the optimal solution to the consumer problem based on the Cobb-Douglas utility function is NOT true?
A) The cross-price elasticities of demand are zero.
B) Both goods have downward sloping demand curves.
C) Both goods are normal goods.
D) The marginal utility of income may be negative.
D
Economics
You might also like to view...
The symmetry principle is the requirement that
A) people in similar situations be treated similarly. B) Society's income be distributed symmetrically among its members. C) the poorest 20 percent of households should receive the same total income as the richest 10 percent of households. D) the average person be made as well off as possible.
Economics
For Brent, the income effect of a wage increase is stronger than the substitution effect. In response to a wage increase, will Brent work more hours or will he work fewer hours?
Economics