(Quasilinear Preferences) A consumer'spreferences over two goods are describedby the following utility function:u(x₁,x₂) = x₂ + Inx, wherex, is theamount of good 1, and is the amountof good 2. Her goal is to choose the bestaffordable bundle, and she has $2available. Quantities must be non-negative, but decimals are fine. (a) Findthe optimal bundle ifp₁ = P₂ = 1. (b) Nowfind the optimal bundle ifp₁ = 1 but= 3.P2Uo1. (Queellinear Preferences) A consumer's preferences over two goods are described by the fol-lowing utility function.wfx)=₂+xwhere ay is the amount of good 1, and ag is the amount of good 2. Ter goal is to choosetan best affordable bundle, and she has 82 available. Quantities naust he non negative, butdecimals are fine.(a) Find the optimal handle if p-2-1.Chy Now End the optimal bandle if p; - 1 bus p: – 3.

Utility function is the function that shows the satisfaction level or measure of usefulness of…

(Quasilinear Preferences) A consumer's preferences over two goods are described by the following utility function: u(x₁, x₂) = x₂ + Inx, wherex, is the amount of good 1, and x2 is the amount of good 2. Her goal is to choose the best affordable bundle, and she has $2 available. Quantities must be non- negative, but decimals are fine. (a) Find the optimal bundle if p₁=p₂ = 1. (b) Now find the optimal bundle if p₁ = 1 but = 3. P₂ 1 (Qualli Preces) A cour's poderences or two goods as described by the fol- Irwing utility function. [x)+JX when ay is the amount of grad 1, nod ay is the amount of good 2. Ter goal is to choose tan bat affordable bendle, and she has 82 available. Quantities naut he aca negative, bet (a) Find the optimal handle if p-p-1. (b) Now End the optional bandle if p 1 bus 3.

(Quasilinear Preferences) A consumer's preferences over two goods are described by the following utility function: u(x₁, x₂) = x₂ + Inx, wherex, is the amount of good 1, and x2 is the amount of good 2. Her goal is to choose the best affordable bundle, and she has $2 available. Quantities must be non- negative, but decimals are fine. (a) Find the optimal bundle if p₁=p₂ = 1. (b) Now find the optimal bundle if p₁ = 1 but = 3. P₂ 1 (Qualli Preces) A cour's poderences or two goods as described by the fol- Irwing utility function. [x)+JX when ay is the amount of grad 1, nod ay is the amount of good 2. Ter goal is to choose tan bat affordable bendle, and she has 82 available. Quantities naut he aca negative, bet (a) Find the optimal handle if p-p-1. (b) Now End the optional bandle if p 1 bus 3.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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