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Which of the following utility functions is quasi-linear? ux,y=Min(xa,yb) ux,y=Max(xa,yb) ux,y=x+y ux,y=xayb All of the above...

  1. Which of the following utility functions is quasi-linear?
  1. ux,y=Min(xa,yb)
  2. ux,y=Max(xa,yb)
  3. ux,y=x+y
  4. ux,y=xayb
  5. All of the above
  6. None of the above
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Homework Answers

Answer #1

A)  ux,y=Min(xa,yb) - This is a perfect complement utility function and also called as minimum utiity function

ux,y=Max(xa,yb) - This is basically maximum utilty function

ux,y=x+y - This is perfect substitute utility function

  ux,y=xayb - This is Cobb Douglas utiltiy function .

The quasi-linear preferences are those where, to achieve their greatest satisfaction, the individual buys only up to a certain amount of one of the two goods (x1 and x2) that make up his basket. That is, in the balance of the consumer, the demand for one of the goods has a limit . This utilty function represents the necessary goods also .

General form of this is - U(x,y) = X1 + Log(X2)

Hence (F) part is correct answer

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