If a linear demand curve A is 'more elastic' than another linear demand curve B then which of the following is true? O The value of the PED is lower on A than on B at all points on the curve. O The absolute value of the PED is lower on A than on B at any point where they cross. O The value of the PED is lower on A than on B at any point where they cross. O The absolute value of the PED is lower on A than on B at all points on the curve. O None of the above.

An individual has the following utility, U = In X + 2 In Y. What do we know about the Marshallian and Hicksian demand elasticities of good x with respect to the price of x? O a. Marshallian elasticity ex.p, will be more negative than Hicksian elasticity ep. O b. Marshallian elasticity ex.p. will be less negative than Hicksian elasticity ep. c. Marshallian elasticity ex.p. will be the same as Hicksian elasticity e.p. O d. Marshallian elasticity and Hicksian elasticity will have opposite signs. Clear my choice An individual has utility function U(X, Y) = X1/5 Y 23. Which of the following is true? O a. Demand for X and Y have constant expenditure shares s and sy. O b. The income effect for both goods is 0. O c. X and Y are net complements. O d. The own-price substitution effect of x (dhldpx) is 0. Clear my choice

If the cross elasticity of demand is -2: O a. The products are substitutes O b. The products are complements O c. The good is normal O d. The good is inferior

24