Which one of the statements below is false for Cobb-Douglas preferences over bundles of x1 and X2 with prices p1 and p2, respectively? a) The optimal bundle is always interior for a positive income, m. b) The Marshallian demand function for x; depends both on p; and pj, j i. c) These preferences are strictly convex and strictly monotone. d) The Engel curves for x, and x2 are positively sloped.

Which one of the statements below is false for Cobb-Douglas preferences over bundles of x1 and X2 with prices p1 and p2, respectively? a) The optimal bundle is always interior for a positive income, m. b) The Marshallian demand function for x; depends both on p; and pj, j i. c) These preferences are strictly convex and strictly monotone. d) The Engel curves for x, and x2 are positively sloped.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.14P

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Further, provide arguments for oragainst the following statement: “The optimal bundle chosen by a consumer with welldefined preferences (rational, continuous, strictly monotone and strictly convex) alwayscontains luxury goods.”
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