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Preferences of the consumer are of perfect substitutes and utility function writes u(x1,x2)=ax1+bx2 for some a,b>0. Which is correct a. The demand function of the
Preferences of the consumer are of perfect substitutes and utility function writes u(x1,x2)=ax1+bx2 for some a,b>0. Which is correct a. The demand function of the consumer is single valued and continuous b. If a=p1 and b=p2 , then the unique optimal demand is x1=x2=w/(p1+p2) c. If prices are such that p1/p2>a/b , then the demand is x1=w/p1 and x2=0 d. If demand of good i under income w=1 is xi=1/pi , then demand of good i under income w=2 is xi=2/pi Preferences of the consumer are of perfect substitutes and utility function writes u(x1,x2)=ax1+bx2 for some a,b>0. Which is correct a. The demand function of the consumer is single valued and continuous b. If a=p1 and b=p2 , then the unique optimal demand is x1=x2=w/(p1+p2) c. If prices are such that p1/p2>a/b , then the demand is x1=w/p1 and x2=0 d. If demand of good i under income w=1 is xi=1/pi , then demand of good i under income w=2 is xi=2/pi
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