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If an individual has preferences U = XY, which of the following is/are true... watch

    • Thread Starter

    First time I have posted in this section. When I chose Economics, I knew it would be difficult, but I didn't know it would be THIS difficult! Anyway I have a class test in a couple of weeks and this question came up on a past paper and I can't figure it out. Could anyone help? Thank you very much!

    If an individual has preferences U = XY, which of the following statements is/are true?

    (i) The individual’s indifference curves are straight lines.

    (ii) The individual’s ordinary (Marshallian) demand curve for good X is

    X = (0.5M)/PX, where M is the individual’s income and PX is the price of good X.

    (iii) The individual’s preferences are homothetic.

    • a) Only (iii)
    • b) Only (ii) and (iii)
    • c) Only (i) and (ii)
    • d) All of them
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