If Jackson's preferences over consumption bundles can be represented by the utility function U(X,Y) = 2X + Y, what will Jackson's optimal bundle, (X*,Y*), be when the price of X is px = 3, the price of Y is py = 1, and Jackson's income is I = 150? = (a) (110,0) (b) (0, 150)

If Jackson's preferences over consumption bundles can be represented by the utility function U(X,Y) = 2X + Y, what will Jackson's optimal bundle, (X,Y), be when the price of X is px = 3, the price of Y is py = 1, and Jackson's income is I = 150? = (a) (110,0) (b) (0, 150)

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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

If Jackson’s preferences over consumption bundles can be represented by the utility function $ U(X,Y) = 2X + Y $, what will Jackson’s optimal bundle, $(X^*, Y^*)$, be when the price of $X$ is $ p_X = 3 $, the price of $Y$ is $ p_Y = 1 $, and Jackson’s income is $ I = 150 $?

(a) $ (110, 0) $
(b) $ (0, 150) $
(c) $ (0, 80) $
(d) $ (50, 0) $
(e) $ (30, 60) $

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