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Questions › UGC-NET › UGC-NET 2023 › Q64
2 marksMicroeconomics › Consumer preferences and utility › Utility functions and monotonic transformationsHardabout 2 min

UGC-NET 2023 Question 64: Consumer preferences and utility

Consider the following statements: (A) If u(x) = V(b(x)) with V'(.) > 0, then V(x) is a utility function representing the same preference as b(x). (B) If two utility functions represent the same preference, the solutions to the utility-maximization problem are the same but the indirect utility functions are different. (C) If local non-satiation holds, any solution to the utility-maximization problem satisfies the budget constraint with equality. (D) If the indirect utility function of b(x) is homogeneous of degree 0, then the indirect utility of u(x) = V(b(x)) with V'(.) > 0 is homogeneous of degree 1. Choose the correct answer from the options given below:

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Consumer preferences and utility has come up 93 times in 7 exams since 2007.

What this question tests

This question is on Utility functions and monotonic transformations, part of Consumer preferences and utility in Microeconomics.

How ordinal utility represents preferences, and why any monotonic transformation of a utility function represents the same ones.

TestStop has 10 past-paper questions on this subtopic.

Take this paper as a timed mockMore on Utility functions and monotonic transformations

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