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Which of the Following Functional Forms for Utility Suggests the Greatest

Question 1

Multiple Choice

Which of the following functional forms for utility suggests the greatest substitution effect when starting at the point where PX=PY\mathrm { P } _ { \mathrm { X } } = \mathrm { P } _ { \mathrm { Y } }


A) U=min(X,Y) \mathrm { U } = \min ( \mathrm { X } , \mathrm { Y } )
B) U=X+XU=X + X
C) U=X1/2Y1/2\mathrm { U } = \mathrm { X } ^ { 1 / 2 } \mathrm { Y } ^ { 1 / 2 }
D) U=X1/4Y3/4\mathrm { U } = \mathrm { X } ^ { 1 / 4 } \mathrm { Y } ^ { 3 / 4 }

Correct Answer:

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