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If Utility Is Separable in a Three-Good Utility Function Then for Changes In

Question 14

Multiple Choice

If utility is separable in a three-good utility function [U(x1,x2,x3) =U1(x1) +U2(x2) +U3(x3) ,Ui>0Ui<0]\left[ U \left( x _ { 1 } , x _ { 2 } , x _ { 3 } \right) = U _ { 1 } \left( x _ { 1 } \right) + U _ { 2 } \left( x _ { 2 } \right) + U _ { 3 } \left( x _ { 3 } \right) , U _ { i } ^ { \prime } > 0 \quad U _ { i } ^ { \prime } < 0 \right] then for changes in p1,x2 and x3 must p _ { 1 } , x _ { 2 } \text { and } x _ { 3 } \text { must }


A) both be gross substitutes for x1 .
B) both be gross complements for x1 .
C) be such that if one is a gross substitute for x1 ,the other is a gross complement for x1 .
D) both be gross substitutes or both be gross complements for x.

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