Thomas has utility U = min{3C, T) over cookies and tea. Suppose the price of cookies declines by 1 dollar. How much of the change in demand for tea is a substitution effect? In other words, what is (change hr/change gr)? %3D O a. 0 O b. 1/4 О с. 13 O d. 2/3 O e. 3/4 O f. 1 Clear my choice
Thomas has utility U = min{3C, T) over cookies and tea. Suppose the price of cookies declines by 1 dollar. How much of the change in demand for tea is a substitution effect? In other words, what is (change hr/change gr)? %3D O a. 0 O b. 1/4 О с. 13 O d. 2/3 O e. 3/4 O f. 1 Clear my choice
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Theory Of Consumer Choice
Section: Chapter Questions
Problem 1PA
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Thomas has utility U = min{3C, T) over cookies and tea. Suppose the price of cookies declines by 1 dollar. How
much of the change in demand for tea is a substitution effect? In other words, what is (change h7/change gr)?
O a. 0
O b. 1/4
O c. 1/3
O d. 2/3
O e. 3/4
O f. 1
Clear my choice
Which of the following utility functions does not represent the same preferences as U(x, y) = x2y/2?
O a. U(x, y) = xy
O b. U(x, y) = In(x) + In(y)
O c. U(x, y) = In(x y)
O d. U(x, y) = x2 + yl/2
Clear my choice
(we haven"
this and yo
not expect
BOANIT
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