1. (2 points) Given the following preferencesu(x1,x2) = x5 + 0.98x95%3DSolve for the utility maximizing bundle (xı, x2) when I = 100, P1 = 1, and P2= 0.98.Show your work.

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Answered: 1. (2 points) Given the following…

1. (2 points) Given the following preferences u(x1,x2) = x5 + 0.98x95 .0.5 Solve for the utility maximizing bundle (xı, x2) when I = 100, P1 = 1, and P2 = 0.98. Show your work. %3D

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

Section: Chapter Questions

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Concept explainers

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.

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1. (2 points) Given the following preferences
u(x1,x2) = x5 + 0.98x95
%3D
Solve for the utility maximizing bundle (xı, x2) when I = 100, P1 = 1, and P2= 0.98.
Show your work.

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5. Jonas purchases only two goods, starfruit (S) and kiwi (K). He has an income of $60 and can buy starfruit at $2 per pound and kiwi at $3 per pound. His utility function is U(S,K)=3S+4K. That is, his (constant) marginal utility for starfruit is 3 and his marginal utility for kiwi is 4. What bundle of starfruit and kiwi should he purchase to maximize his utility? Why?
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4B. Which one(s) of the following functions v(x, y) = 2x°y – 100, w(x, y) = 3(x + y) + 120, t(x, y) = xy - 150 is an ordinal utility function for a preference relation which admits u(x, y) = 3x/2y1/2 + 120 as an utility function? (a) w only (b) v and w (c) v and t (d) v, w and t (e) none of the previous four statements is correct. %3D %3!
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Subpart 7 only
part C D