Category: Economics

➤ How do you derive Marshallian demand from a CES utility?
Maximize CES utility subject to a budget using a Lagrangian. First-order conditions produce consumption ratios determined by α_i and prices p_i. Solve those ratios with the budget constraint to get demands proportional to α_i^σ p_i^{-σ}. The CES price index P = (Σ_j α_j p_j^{1-σ})^{1/(1-σ)} yields a compact demand expression.

➤ How does inconsistency between speech and body language affect trust?
Inconsistency creates cognitive dissonance for listeners. When tone, facial expressions, posture, or timing do not align with words, observers notice leakage and reduce trust. People look for baseline behavior and context; clear mismatches raise suspicion of deception or uncertainty. Repeated inconsistency damages credibility faster than a single slip.

Which of these is not a type of elasticity?
Unitary
Binary
Inelastic
Elastic