Homework Help is Here – Start Your Trial Now!
Business
Economics
22. If the cost of buying 10 units of good 1 is less than 1/2w, a consumer buys 10 units of good 1 and spends her remaining wealth on good 2. Otherwise she spends half of her wealth on each good. The utility function is

22. If the cost of buying 10 units of good 1 is less than 1/2w, a consumer buys 10 units of good 1 and spends her remaining wealth on good 2. Otherwise she spends half of her wealth on each good. The utility function is

ECON MICRO
ECON MICRO
5th Edition
ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter6: Consumer Choice And Demand
Section: Chapter Questions
Problem 1.3P
See similar textbooks
icon
Related questions
Question
22. If the cost of buying 10 units of good 1 is less than 1/2w, a consumer buys 10 units of good 1 and spends her remaining wealth on good 2. Otherwise she spends half of her wealth on each good. The utility function is (x1x2 if x₁ ≤ 10 (10x2 if x₁ >10 A. u(x₁, x₂) = B. u(x₁, x₂) C. u(x₁, x₂) = (10x2 (10x2 if x₁ ≤ 10 (x₁x₂ if x₁ > 10 (x1x₂ if x₁ <10 (10x2 if x₁ ≥10 D. u(x₁, x2) = (10x2 if x₁ <10 x₁ ≥ 10
Transcribed Image Text:22. If the cost of buying 10 units of good 1 is less than 1/2w, a consumer buys 10 units of good 1 and spends her remaining wealth on good 2. Otherwise she spends half of her wealth on each good. The utility function is (x1x2 if x₁ ≤ 10 (10x2 if x₁ >10 A. u(x₁, x₂) = B. u(x₁, x₂) C. u(x₁, x₂) = (10x2 (10x2 if x₁ ≤ 10 (x₁x₂ if x₁ > 10 (x1x₂ if x₁ <10 (10x2 if x₁ ≥10 D. u(x₁, x2) = (10x2 if x₁ <10 x₁ ≥ 10
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Ordinary and Capital gains
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
ECON MICRO
ECON MICRO
Economics
ISBN:
9781337000536
Author:
William A. McEachern
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Micro Economics For Today
Micro Economics For Today
Economics
ISBN:
9781337613064
Author:
Tucker, Irvin B.
Publisher:
Cengage,
Economics For Today
Economics For Today
Economics
ISBN:
9781337613040
Author:
Tucker
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS