Between 1990 and 2000, a particular consumer's income increased by 25%, while the price of X and all other goods increased by 10%. It was observed that the consumer's consumption of X and all other goods both increased by 15%. A. The consumer did not regard X and all other goods as perfect complements. B. The consumer's preference cannot be represented by a Cobb-Douglas utility function. C. The consumer's preference can be represented by a Cobb-Douglas utility function. D. The consumer's preference cannot be represented by a quasilinear utility function. E. More than one of the above options is true. The answer for this question is D and I understand why D is correct. However, for options B and C, can someone explain how I should rule them out
Between 1990 and 2000, a particular consumer's income increased by 25%, while the price of X and all other goods increased by 10%. It was observed that the consumer's consumption of X and all other goods both increased by 15%. A. The consumer did not regard X and all other goods as perfect complements. B. The consumer's preference cannot be represented by a Cobb-Douglas utility function. C. The consumer's preference can be represented by a Cobb-Douglas utility function. D. The consumer's preference cannot be represented by a quasilinear utility function. E. More than one of the above options is true. The answer for this question is D and I understand why D is correct. However, for options B and C, can someone explain how I should rule them out
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.7P
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Between 1990 and 2000, a particular consumer's income increased by 25%, while the price of X and all other goods increased by 10%. It was observed that the consumer's consumption of X and all other goods both increased by 15%.
A. The consumer did not regard X and all other goods as perfect complements.
B. The consumer's preference cannot be represented by a Cobb-Douglas utility function.
C. The consumer's preference can be represented by a Cobb-Douglas utility function.
D. The consumer's preference cannot be represented by a quasilinear utility function.
E. More than one of the above options is true.
The answer for this question is D and I understand why D is correct. However, for options B and C, can someone explain how I should rule them out?
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