Glossary of economics research
Results of search for homothetic follow:
homothetic:
Let u(x) be a function homogeneous of degree one in x. Let g(y) be a function
of one argument that is monotonically increasing in y.
Then u(g()) is a homothetic function of y.
So a function is homothetic in y if it can be decomposed into an inner
function that is monotonically increasing in y and an outer function that is
homogeneous of degree one in its argument.
In consumer theory there are some useful analytic results that can come from
studing homothetic utility functions of consumption.
Contexts: micro theory.
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