Sanghoon has a utility function over audiobooks, A, and movie downloads, M, given byLinh has a utility function given by0U= √AM.U=AM.Explain why Sanghoon and Linh have the same ordering over any two bundles and therefore have the same ordinal preferences.Sanghoon and Linh have the same ordering over any two bundles and therefore have the same ordinal preferences becauseA. Sanghoon's utility function is the inverse of Linh's utility function.B. Sanghoon's utility function is a monotonic transformation of Linh's utility function.C. Sanghoon's utility function is a function of the same goods as Linh's utility function.D. Sanghoon's utility function generates the same cardinal values as Linh's utility function.

The term "utility" is used to characterise a good or service's value or worth. Utility is, more…

Sanghoon has a utility function over audiobooks, A, and movie downloads, M, given by Linh has a utility function given by U=√AM. U=AM. Explain why Sanghoon and Linh have the same ordering over any two bundles and therefore have the same ordinal preferences. Sanghoon and Linh have the same ordering over any two bundles and therefore have the same ordinal preferences because OA. Sanghoon's utility function is the inverse of Linh's utility function. B. Sanghoon's utility function is a monotonic transformation of Linh's utility function. C. Sanghoon's utility function is a function of the same goods as Linh's utility function. R. Sanghoon's utility function generates the same cardinal values as Linh's utility function.

Sanghoon has a utility function over audiobooks, A, and movie downloads, M, given by Linh has a utility function given by U=√AM. U=AM. Explain why Sanghoon and Linh have the same ordering over any two bundles and therefore have the same ordinal preferences. Sanghoon and Linh have the same ordering over any two bundles and therefore have the same ordinal preferences because OA. Sanghoon's utility function is the inverse of Linh's utility function. B. Sanghoon's utility function is a monotonic transformation of Linh's utility function. C. Sanghoon's utility function is a function of the same goods as Linh's utility function. R. Sanghoon's utility function generates the same cardinal values as Linh's utility function.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

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

Sanghoon has a utility function over audiobooks, A, and movie downloads, M, given by
Linh has a utility function given by
0
U= √AM.
U=AM.
Explain why Sanghoon and Linh have the same ordering over any two bundles and therefore have the same ordinal preferences.
Sanghoon and Linh have the same ordering over any two bundles and therefore have the same ordinal preferences because
A. Sanghoon's utility function is the inverse of Linh's utility function.
B. Sanghoon's utility function is a monotonic transformation of Linh's utility function.
C. Sanghoon's utility function is a function of the same goods as Linh's utility function.
D. Sanghoon's utility function generates the same cardinal values as Linh's utility function.

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