Suppose an individual only consumes two goods, X and Y. Which of the following statements is true? O a. Marshallian demand for X and Y are homogenous of degree zero in prices. O b. Indirect utility is homogenous of degree zero in prices. Oc. When X and Y are both normal goods, the consumer has constant expenditure shares for both goods. O d. Marshallian elasticity ep, is more negative than Hicksian elasticity ep. when X is a normal good. Clear my choice

When goods are complements, there is a direct relationship between the price of one and the demand for the other. O 1) True O 2) False

Modou has a utility function U(X1,X2) = 2X1 + X2. The prices of X1 & X2 are $1 each and Modou has an income of $20. H ow much X1 and X2 does Modou consume? a. X1 = 10 units and X2 = 10 units Ob. X1 = 10 units and X2 = 0 %3D O c. X1 = 20 units and X2 = 0 O d.X1 = 0 and X2 = 20 units

Suppose that price of good X rises by 25 % while price of Y rises by 50% and Income rises by 50%. Then which of the following is correct? O Budget line becomes flatter and consumer is able to afford new bundles that were not affordable before. Budget line becomes steeper and consumer is not able to afford some bundles that were affordable before. Budget line becomes flatter and consumer is not able to afford some bundles that were affordable before. Budget line becomes steeper and consumer is able to afford new bundles that were not affordable before.