Suppose tastes satisfy our usual assumptions. Kinks in budget constraints do not give rise to the possibility of multiple solutions unless the kinds produce a non-convexity in the choice set.
Answer the following statement true (T) or false (F)
True
Rationale: Multiple solutions can only arise from non-convexities --- and if tastes are convex, it must be that the non-convexity is in the choice set. But not all kinks produce non-convexities -- only inward pointing kinks.
Economics
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