Which of the following utility functions represent preferences of a consumer who does not have homothetic preferences? A)U(x, y)= xy. B)U(x, y)= x + 2y. C)U(x, y)= x + y^.5. D)U(x, y)= min{x, y}. E)More than one of the above.

Question

Quizplus · Accepted Answer

Homothetic preferences imply that the marginal rate of substitution (MRS) is constant along rays from the origin. The utility function U(x, y) = x + y^0.5 does not have this property, as the MRS changes with different levels of x and y, indicating non-homothetic preferences.

Which of the Following Utility Functions Represent Preferences of a Consumer