As defined in Chapter 3, a utility function is homothetic if any straight line through the origin cuts all indifference curves at points of equal slope: The MRS depends on the ratio y/x. a. Prove that, in this case, 11eb773e_d120_88cb_adfc_1ddbe87871a6_SM3017_11 is constant. b. Prove that if an individual's tastes can be represented by a homothetic indifference map then price and quantity must move in opposite directions; that is, prove that Giffen's paradox cannot occur.

Microeconomic Theory 11th Edition by Walter Nicholson,Christopher Snyder

النسخة 11الرقم المعياري الدولي: 978-1111525538

Microeconomic Theory 11th Edition by Walter Nicholson,Christopher Snyder

النسخة 11الرقم المعياري الدولي: 978-1111525538

تمرين 3

As defined in Chapter 3, a utility function is homothetic if any straight line through the origin cuts all indifference curves at points of equal slope: The MRS depends on the ratio y/x.
a. Prove that, in this case,

is constant.
b. Prove that if an individual's tastes can be represented by a homothetic indifference map then price and quantity must move in opposite directions; that is, prove that Giffen's paradox cannot occur.

التوضيح

موثّق

a)
It is required to be shown that if a ...