Suppose James's preferences over consumption bundles (X, Y) can be represented by the utility function U₁(X, Y) = min{2X, Y} and suppose Petra's preferences over the consumption bundles (X, Y) can be represented by the utility function Up(X,Y) = min{3X, 8Y}. Which of the following statements is NOT true? (a) Both James's and Petra's preferences are homothetic (b) The ratio at Petra's optimal bundle is greater than the ratio at James's optimal bundle (c) The functions U₁ and Up are both homogeneous of degree 1 (d) If James's and Petra's incomes triple they will respond by tripling their purchases

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Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.