An individual derives utility from games, g (y-axis), and toy airplane

An individual derives utility from games, g (y-axis), and toy airplanes, a (x-axis), described by the utility function U(g,a) = g0.6a0.4. The price per game is $20 and the price of toy airplanes is $10. Using the slope of the income consumption curve (ICC), determine whether games and toy airplanes are normal or inferior goods when income increases from $100 to $200.

A) Both goods are normal goods with an ICC slope of 3/4.
B) Both goods are normal goods with an ICC slope of 4/3.
C) Both goods are inferior goods with an ICC slope of -4/3.
D) Both goods are inferior goods with an ICC slope of – 3/4.

 

ANSWER

A

 

Expert paper writers are just a few clicks away

Place an order in 3 easy steps. Takes less than 5 mins.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00