Faa's utility function for coffee (good X) and muffins (good Y) is given as U(x,y) = x0.5y0.5. If she has $192 budget to spend on coffee on muffins. And the price of coffee is $8.00 (Px = 8), and the price of muffin is $16.00 (Py = 16). If coffee (good X) is graph on the horizontal axis and muffins (good Y) on the vertical axis. Faa's utility-maximizing consumption of coffee is and muffin is (Please input your answers in numerical values only without any decimal place or comma). Faa is offered a job in another city. Due to the high cost of living in that city, she is offered an income allowance of $8 to add to her coffee and muffin budget, the prices in the new city she's offered the job are $10.00 per cup of coffee and $20. O for a muffin. Faa's optimal consumption of coffee will be and muffin will be if she moved to take the job. (Please input your answers in numerical values only without any decimal place or comma). Should Faa take the offer? (hint: consider Faa's utility in her old city and her utility in the city she's offered the job.) (Please put your answer as yes or no, lower cases only.)

Faa's utility function for coffee (good X) and muffins (good Y) is given as U(x,y) = x0.5y0.5. If she has $192 budget to spend on coffee on muffins. And the price of coffee is $8.00 (Px = 8), and the price of muffin is $16.00 (Py = 16). If coffee (good X) is graph on the horizontal axis and muffins (good Y) on the vertical axis. Faa's utility-maximizing consumption of coffee is and muffin is (Please input your answers in numerical values only without any decimal place or comma). Faa is offered a job in another city. Due to the high cost of living in that city, she is offered an income allowance of $8 to add to her coffee and muffin budget, the prices in the new city she's offered the job are $10.00 per cup of coffee and $20. O for a muffin. Faa's optimal consumption of coffee will be and muffin will be if she moved to take the job. (Please input your answers in numerical values only without any decimal place or comma). Should Faa take the offer? (hint: consider Faa's utility in her old city and her utility in the city she's offered the job.) (Please put your answer as yes or no, lower cases only.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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