Question

1. Which of the following best describes the technique for deriving the demand formula of a perfect complements consumer?

1. Take the log of the agent’s utility function and then determine the agent’s Cobb-Douglas parameter via linear regression.
2. Figure out whether the agent’s indifference curves are flatter or steeper than the budget line
3. Set excess demand equal to zero
4. Intersect the kink line and the budget line
5. Solve a quadratic equation

Answer 1

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