If two goods, x and y, are perfect substitutes, then which of the ...

[cartlidgeashley]

If two goods, x and y, are perfect substitutes, then which of the following best represents the utility function for the two goods?
 
  A) U = x + y
  B) U = x  y
  C) U = x2 + y2
  D) Any of the above.

Question 2

A collective consumption good may be inefficiently produced by the private sector because _____.
 
  a. it is inefficient to raise price above marginal cost
  b. of free riding problems
  c. fixed costs are too high
   d. private producers are greedy

[sylvia]

Answer to Question 1

A

Answer to Question 2

a