11) A consumer's preferences for food (F) and clothing (C) are given by U(F,C) = F0.2C 0.8. The price of food is $4, and the price of clothing is $8. The consumer has an income of $3600. a) What is the utility maximizing choice of food and clothing? b) How would the utility maximizing choice change if price of clothing increased to $14? c) Given the answers to the previous parts plot a linear approximation to the demand function for clothing.
11) A consumer's preferences for food (F) and clothing (C) are given by U(F,C) = F0.2C 0.8. The price of food is $4, and the price of clothing is $8. The consumer has an income of $3600. a) What is the utility maximizing choice of food and clothing? b) How would the utility maximizing choice change if price of clothing increased to $14? c) Given the answers to the previous parts plot a linear approximation to the demand function for clothing.
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.7P
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![11) A consumer's preferences for food (F) and clothing (C) are given by U(F,C) = F0.2C 0.8. The price
of food is $4, and the price of clothing is $8. The consumer has an income of $3600. a) What is the
utility maximizing choice of food and clothing? b) How would the utility maximizing choice change
if price of clothing increased to $14? c) Given the answers to the previous parts plot a linear
approximation to the demand function for clothing.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5768d2ab-1c29-4ad6-80d2-616ff629f9ef%2F4db0a052-d8af-4cf9-9fa7-ff7b440d20bc%2F8qsc8t_processed.jpeg&w=3840&q=75)
Transcribed Image Text:11) A consumer's preferences for food (F) and clothing (C) are given by U(F,C) = F0.2C 0.8. The price
of food is $4, and the price of clothing is $8. The consumer has an income of $3600. a) What is the
utility maximizing choice of food and clothing? b) How would the utility maximizing choice change
if price of clothing increased to $14? c) Given the answers to the previous parts plot a linear
approximation to the demand function for clothing.
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