Connie has a monthly income of $20.00 that she allocates among two goods: meat (M) and potatoes (P) O 8- Suppose meat costs $10.00 per pound and potatoes $2.00 per pound. Connie's budget line (L) is drawn in the figure to the right 7- 6- Suppose also that her utility function is given by the equation U(M,P) 2M P. What combination of meat and potatoes should she buy to maximize her utility? 5 To maximize utility, Connie should buy pounds of meat and pounds of potatoes. (Enter your responses rounded to two decimal places.) An outbreak of potato rot raises the price of potatoes to $4.00 per pound. What combination of meat and potatoes maximizes Connie's utility now? L. U3 pounds of meat and Connie now maximizes utility by consuming pounds of 1 U, potatoes. (Enter your responses rounded to two decimal places.) 2 3 10 11 12 13 14 15 16 Potatoes When using the multipoint curve drawing tool, hit the
Connie has a monthly income of $20.00 that she allocates among two goods: meat (M) and potatoes (P) O 8- Suppose meat costs $10.00 per pound and potatoes $2.00 per pound. Connie's budget line (L) is drawn in the figure to the right 7- 6- Suppose also that her utility function is given by the equation U(M,P) 2M P. What combination of meat and potatoes should she buy to maximize her utility? 5 To maximize utility, Connie should buy pounds of meat and pounds of potatoes. (Enter your responses rounded to two decimal places.) An outbreak of potato rot raises the price of potatoes to $4.00 per pound. What combination of meat and potatoes maximizes Connie's utility now? L. U3 pounds of meat and Connie now maximizes utility by consuming pounds of 1 U, potatoes. (Enter your responses rounded to two decimal places.) 2 3 10 11 12 13 14 15 16 Potatoes When using the multipoint curve drawing tool, hit the
Chapter21: Demand: Consumer Choic
Section: Chapter Questions
Problem 1E
Related questions
Question
Transcribed Image Text:Connie has a monthly income of $20.00 that she allocates among two goods: meat (M)
and potatoes (P)
O
8-
Suppose meat costs $10.00 per pound and potatoes $2.00 per pound. Connie's
budget line (L) is drawn in the figure to the right
7-
6-
Suppose also that her utility function is given by the equation U(M,P) 2M P. What
combination of meat and potatoes should she buy to maximize her utility?
5
To maximize utility, Connie should buy
pounds of meat and
pounds of potatoes.
(Enter your responses rounded to two decimal places.)
An outbreak of potato rot raises the price of potatoes to $4.00 per pound. What
combination of meat and potatoes maximizes Connie's utility now?
L.
U3
pounds of meat and
Connie now maximizes utility by consuming
pounds of
1
U,
potatoes. (Enter your responses rounded to two decimal places.)
2 3
10 11 12 13 14 15 16
Potatoes
When using the multipoint curve drawing tool, hit the <esc key to end your line.
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