If the income elasticity is negative 3.5, is this a substitute, complement, normal or an inferior good? Is this elastic or inelastic?
September 3, 2020
A new truck was purchased for $180,000 by trading in a similar truck that had a book value of $55,200.
September 3, 2020

Sarah’s preferences for consumption and leisure can be expressed as U(C,L)=4C1/2L1/2. This utility function implies that her marginal utility of leisure is 2(C/L)1/2 and her marginal utility of consumption is 2(C/L)−1/2 .

There are 110 hours in the week available to split between work and leisure. Sarah earns $20 per hour after taxes. She also receives $400 each week in royalty payments from an oil well she owns.

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