Carla has utility function U (x, y) = vx + 2y over goods x and y a) Do we have a name for this type of utility function? Are Carla's preferences well-behaved? b) Let Carla have budget I=$40, and let prices be Px=$2, Py=$8. What bundle will Carla consume? c) What if Carla's budget drops to $20? [Think about: could this utility function describe Carla's preferences over bread and ice cream?]

Carla has utility function U (x, y) = vx + 2y over goods x and y a) Do we have a name for this type of utility function? Are Carla's preferences well-behaved? b) Let Carla have budget I=$40, and let prices be Px=$2, Py=$8. What bundle will Carla consume? c) What if Carla's budget drops to $20? [Think about: could this utility function describe Carla's preferences over bread and ice cream?]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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