5.3 (0) Ambrose, the nut and berry consumer, has a utility function U (r1, x2) = 4/TT+x2, where T is his consumption of nuts and r2 is his consumption of berries. (a) The commodity bundle (25,0) gives Ambrose a utility of 20. Other points that give him the same utility are (16, 4), (9, ), (4, ), and (0,- axes below and draw a red indifference curve through them. -), (1, ). Plot these points on the (b) Suppose that the price of a unit of nuts is 1, the price of a unit of berries is 2, and Ambrose's income is 24. Draw Ambrose's budget line with blue ink. How many units of nuts does he choose to buy? (c) How many units of berries?.
5.3 (0) Ambrose, the nut and berry consumer, has a utility function U (r1, x2) = 4/TT+x2, where T is his consumption of nuts and r2 is his consumption of berries. (a) The commodity bundle (25,0) gives Ambrose a utility of 20. Other points that give him the same utility are (16, 4), (9, ), (4, ), and (0,- axes below and draw a red indifference curve through them. -), (1, ). Plot these points on the (b) Suppose that the price of a unit of nuts is 1, the price of a unit of berries is 2, and Ambrose's income is 24. Draw Ambrose's budget line with blue ink. How many units of nuts does he choose to buy? (c) How many units of berries?.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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