Given the utility functionU = 0.4* X1, 0.25 * X2, 0.35 * X3 andincome M = 300, how much will theconsumer purchase of each good whenPa₁ = $8, P₂ =$6, Pa3 = $10.Select one:O a. (10,10.5,12)O b. (15,23,0)O c. (15,12.5,10.5)O d. None of the above

Optimal consumption bundle: The optimal consumption bundle is such that at that bundle the…

Answered: Given the utility function U = 0.4* X1,…

Given the utility function U = 0.4* X1, 0.25 * X2, 0.35 * X3 and income M = 300, how much will the consumer purchase of each good when Px₁ = $8, Px₂ = $6, Prz = $10. Pri Paz Select

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

Given the utility function
U = 0.4* X1, 0.25 * X2, 0.35 * X3 and
income M = 300, how much will the
consumer purchase of each good when
Pa₁ = $8, P₂ =
$6, Pa3 = $10.
Select one:
O a. (10,10.5,12)
O b. (15,23,0)
O c. (15,12.5,10.5)
O d. None of the above

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