An individual derives utility from consuming "all other goods," g, and clean air (measured by the reduction in particulate matter per m3), a, as measured by the utility function U(g,a) = g0.6a0.4. The price of consumer goods equals $20 and the price of clean air (abatement) equals $10. What is the slope of the Engel curve when income increases from $100 to $200?
A) The slope is 25.
B) The slope is -25.
C) The slope is zero.
D) The slope is infinite.
A
Economics
You might also like to view...
Since it does not have to be converted into anything else to make purchases, ________ is the most liquid asset
A) money B) stock C) artwork D) gold
Economics
The marginal productivity theory is irrelevant to organizing production in a socialist society.
Answer the following statement true (T) or false (F)
Economics
Which of the following is TRUE?
A. MPC + MPS = 1 -APC B. APC + APS < 1 C. APC + MPS > 1 D. APC + APS = MPS + MPS
Economics
The low point in the business cycle is referred to as the
A) expansion. B) boom. C) trough. D) peak.
Economics