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People will choose the alternative with the highest utility 5. Rental Plans: u(x, y) = x1/2y1/2, m = 120, py = 1. Plan A is fee 20+ 0.20 per km, Plan C is fee 40+ 0.10 per km. Which plan is a better deal? 100 T 90 80 70 60 3 50 40 30 20 10 0 100 200 300 400 500 600 700 800 X Axis Nearly all decisions can be written as choice problems 6. Children are a discrete choice: u(x, y) = x1/2+y1/2, m = 16, py = 1. How much of your daily m will you give up to have x = 1 kid? How about x = 4 kids? X Axis

People will choose the alternative with the highest utility 5. Rental Plans: u(x, y) = x1/2y1/2, m = 120, py = 1. Plan A is fee 20+ 0.20 per km, Plan C is fee 40+ 0.10 per km. Which plan is a better deal? 100 T 90 80 70 60 3 50 40 30 20 10 0 100 200 300 400 500 600 700 800 X Axis Nearly all decisions can be written as choice problems 6. Children are a discrete choice: u(x, y) = x1/2+y1/2, m = 16, py = 1. How much of your daily m will you give up to have x = 1 kid? How about x = 4 kids? X Axis

Economics Today and Tomorrow, Student Edition
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter5: Buying The Necessities
Section5.2: Cloting Choices
Problem 1R
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People will choose the alternative with the highest utility 5. Rental Plans: u(x, y) = x1/2y1/2, m = 120, py = 1. Plan A is fee 20+ 0.20 per km, Plan C is fee 40+ 0.10 per km. Which plan is a better deal? 100 T 90 80 70 60 3 50 40 30 20 10 0 100 200 300 400 500 600 700 800 X Axis Nearly all decisions can be written as choice problems 6. Children are a discrete choice: u(x, y) = x1/2+y1/2, m = 16, py = 1. How much of your daily m will you give up to have x = 1 kid? How about x = 4 kids? X Axis
Transcribed Image Text:People will choose the alternative with the highest utility 5. Rental Plans: u(x, y) = x1/2y1/2, m = 120, py = 1. Plan A is fee 20+ 0.20 per km, Plan C is fee 40+ 0.10 per km. Which plan is a better deal? 100 T 90 80 70 60 3 50 40 30 20 10 0 100 200 300 400 500 600 700 800 X Axis Nearly all decisions can be written as choice problems 6. Children are a discrete choice: u(x, y) = x1/2+y1/2, m = 16, py = 1. How much of your daily m will you give up to have x = 1 kid? How about x = 4 kids? X Axis
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