Noah has $30 that can be spent on either brownies or muffins. The price of brownies is $5 and the price of muffins is $10. Assume Noah has the next utility function: U (B, M) = In (B) + M Where B are brownies and M are muffins. 2.1 How many muffins would Noah buy? 2.2 If the price of muffins increases from $10 to $15, how many muffins will Noah buy? 2.3 Before the increase on muffins price, Noah's optimal bundle gave him an utility of u. If we keep that utility constant, with the new price ratio, how many muffins would Noah consume?
Noah has $30 that can be spent on either brownies or muffins. The price of brownies is $5 and the price of muffins is $10. Assume Noah has the next utility function: U (B, M) = In (B) + M Where B are brownies and M are muffins. 2.1 How many muffins would Noah buy? 2.2 If the price of muffins increases from $10 to $15, how many muffins will Noah buy? 2.3 Before the increase on muffins price, Noah's optimal bundle gave him an utility of u. If we keep that utility constant, with the new price ratio, how many muffins would Noah consume?
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Transcribed Image Text:Noah has $30 that can be spent on either brownies or muffins. The price of brownies is $5 and the price of muffins
is $10.
Assume Noah has the next utility function:
U (B, M) = In (B) + M
Where B are brownies and M are muffins.
2.1
How many muffins would Noah buy?
2.2
If the price of muffins increases from $10 to $15, how many muffins will Noah buy?
2.3
Before the increase on muffins price, Noah's optimal bundle gave him an utility of u. If we keep that utility
constant, with the new price ratio, how many muffins would Noah consume?
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