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1) Ambrose has the utility function U(x,x:) = 4x: + xX:. (X:: nuts, x:: berries). a) If Ambrose is initially consuming 25 units of nuts and 17 units of berries, then what is the largest number of berries that he would be willing to give up in return for an additonal 39 units of nuts? b) If Ambrose has an income of 30 liras, the price of nuts is 2 and the price of berries is 1 liras, what is the ordinary demand of Ambrose? What is the corresponding utility level?

1) Ambrose has the utility function U(x,x:) = 4x: + xX:. (X:: nuts, x:: berries). a) If Ambrose is initially consuming 25 units of nuts and 17 units of berries, then what is the largest number of berries that he would be willing to give up in return for an additonal 39 units of nuts? b) If Ambrose has an income of 30 liras, the price of nuts is 2 and the price of berries is 1 liras, what is the ordinary demand of Ambrose? What is the corresponding utility level?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1) Ambrose has the utility function U(x1,x2) = 4x1 + x2. (X1: nuts, X:: berries). 1/2 a) If Ambrose is initially consuming 25 units of nuts and 17 units of berries, then what is the largest number of berries that he would be willing to give up in return for an additonal 39 units of nuts? b) If Ambrose has an income of 30 liras, the price of nuts is 2 and the price of berries is 1 liras, what is the ordinary demand of Ambrose? What is the corresponding utility level?
Transcribed Image Text:1) Ambrose has the utility function U(x1,x2) = 4x1 + x2. (X1: nuts, X:: berries). 1/2 a) If Ambrose is initially consuming 25 units of nuts and 17 units of berries, then what is the largest number of berries that he would be willing to give up in return for an additonal 39 units of nuts? b) If Ambrose has an income of 30 liras, the price of nuts is 2 and the price of berries is 1 liras, what is the ordinary demand of Ambrose? What is the corresponding utility level?
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