Question
Amy only cares about how much coffee she drinks. She can buy coffee in 10-ounce cups or in 20-ounce cups. Amy's preferences are represented by
Amy only cares about how much coffee she drinks. She can buy coffee in 10-ounce cups or in 20-ounce cups. Amy's preferences are represented by the following utility function:
u(x,y)=x+2y
where x is the number of 10-ounce cups and y is the number of 20-ounce cups.
- is Amy's preference homothetic?Explain your answer for full credits.Be sure to explain what homothetic preference means.
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The Economics of Public Issues
Authors: Roger LeRoy Miller, Daniel K. Benjamin, Douglass C. North
19th edition
134018974, 134018973, 9780134020532 , 978-0134018973
