Quasilinear preferences are homothetic when the optimal amount of one of the goods is not affordable.

Question

Quizplus · Accepted Answer

Quasilinear preferences are not necessarily homothetic because homothetic preferences imply that the shape of indifference curves is consistent across all levels of income, whereas quasilinear preferences allow for the optimal amount of one good to be constant regardless of income levels, not affecting the affordability of goods.

Quasilinear Preferences Are Homothetic When the Optimal Amount of One