If tastes are homothetic, there exists a utility function (that represents those tastes) such that the indirect utility function is homogeneous of degree 1 in income.
Answer the following statement true (T) or false (F)
True
Rationale: Homothetic tastes are such that all optimal bundles like on the same ray from the origin if prices remain unchanged. Thus, I can increase income by a factor k and know that the optimal bundle will by increased by a factor k. If the labeling of the indifference curves is then such that increasing a bundle by a factor k leads to k times as much utility, we have a utility function that makes this true. (This utility function would be homogeneous of degree 1.)
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