Question 5 Imagine U = VTy and Income=20, Px-2 and Py 2. What is the optimal bundle? %3D x*=5, y*=5 O x*-5, y*-10 O x*-10, y"-5 O x*-10, y*=10 Question 6 With a Cobb-Douglas utility function, what must be true about the slope of the indifference curve associated with the optimal bundle and the slope of the budget constraint? the slope of the indifference curve is greater than the slope of the budget constraint, both in absolute value the slope of the indifference curve is less than the slope of the budget constraint, both in absolute value the slope of the indifference curve is equal to the slope of the budget constraint, both in absolute value O Both slopes are equal to zero
Question 5 Imagine U = VTy and Income=20, Px-2 and Py 2. What is the optimal bundle? %3D x*=5, y*=5 O x*-5, y*-10 O x*-10, y"-5 O x*-10, y*=10 Question 6 With a Cobb-Douglas utility function, what must be true about the slope of the indifference curve associated with the optimal bundle and the slope of the budget constraint? the slope of the indifference curve is greater than the slope of the budget constraint, both in absolute value the slope of the indifference curve is less than the slope of the budget constraint, both in absolute value the slope of the indifference curve is equal to the slope of the budget constraint, both in absolute value O Both slopes are equal to zero
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Question 5
Imagine U =
Ty and Income=20, Px-2 and Py=2. What is the optimal bundle?
%3D
x*=5, y*=5
O x*-5, y*-10
O x*-10, y"=5
O x*-10, y*=10
Question 6
With a Cobb-Douglas utility function, what must be true about the slope of the indifference curve
associated with the optimal bundle and the slope of the budget constraint?
the slope of the indifference curve is greater than the slope of the budget constraint, both in absolute value
the slope of the indifference curve is less than the slope of the budget constraint, both in absolute value
the slope of the indifference curve is equal to the slope of the budget constraint, both in absolute value
O Both slopes are equal to zero
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