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Alice has homothetic preferences over n goods, qi, i=1,...,n. Her Marshallian demands are fi(y,p1,...,pn), i=1,...,n, where y is total budget and pi, i=1,...,n, is the price of the ith good.

 

Which of the following is necessarily true?

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Agatha consumes two goods, q1 and q2. Her marginal rate of substitution is -qexp(-q1).  Income expansion paths all have which of the following forms (each for some different value of A)?

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Suppose total budget elasticities are independent of total budget for all goods.  What must be true of preferences?

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If preferences are strictly convex then there can be multiple tangencies between indifference curves and the budget constraint only if the budget set is not convex.

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Assuming no corner solutions, an income expansion path is a locus of points of equal MRS.

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Vlad consumes goods q. His preferences are homothetic.  What must be true of any utility function u(q) representing his preferences?

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Maya consumes two goods, lipstick q1 and mascara q2. The figure below shows her indifference map. 

Which of the following accurately describes her preferences? 

Image failed to load: Indifference curves

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Sofia consumes two goods, salt q1 and vinegar q2. She currently consumes a bundle (1,1) and is indifferent between this and any other bundle such that q1+√q2=2.  The rest of her indifference map consists of indifference curves defined by  q1/υ+√(q2/υ)=2 for different values of υ.  

What class of preferences does she belong to?

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John consumes two goods, q1 and q2. His preferences are captured by utility function u(q1,q2)=q1q2+q12.

John's preferences are

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If a consumer consumes two goods and preferences are homothetic then utility can be written as a function of the ratio of the two quantities.
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