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.
a
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Federal transfers are expected to grow significantly in the coming decades, due especially to increases in ________
A) federal government consumption B) federal deficits C) Medicare and Medicaid D) Social Security payments
Which of the following properties can be associated with an indifference curve of a risk-averse investor?
a. Indifference curve for a risk-averse investor is a vertical line parallel to the variance axis. b. Two indifference curves can intersect at the equilibrium combination of risk and return. c. An indifference curve closer to the expected return axis gives a better utility than the one farther away. d. Indifference curve for a risk-averse investor is always downward sloping.