Suppose that Abel and Eden spend their incomes on two goods, food (F) and clothing (C). Abel’s preferences are represented by the utility function U(F,C)=10FC, while Eden’s preferences are represented by the utility function U(F,C)= 0.20F2C2 A) With food on the horizontal axis and clothing on the vertical axis, identify on a graph the set of points that give Abel the same level of utility as the bundle (10, 5). Do the same for Eden on a separate graph. B) On the same two graphs, identify the set of bundles that give Abel and Eden the same level of utility as the bundle (15, 8). C) Do you think Abel and Eden have the
Suppose that Abel and Eden spend their incomes on two goods, food (F) and clothing (C). Abel’s preferences are represented by the utility function U(F,C)=10FC, while Eden’s preferences are represented by the utility function U(F,C)= 0.20F2C2 A) With food on the horizontal axis and clothing on the vertical axis, identify on a graph the set of points that give Abel the same level of utility as the bundle (10, 5). Do the same for Eden on a separate graph. B) On the same two graphs, identify the set of bundles that give Abel and Eden the same level of utility as the bundle (15, 8). C) Do you think Abel and Eden have the
Chapter10: Consumer Choice Theory
Section: Chapter Questions
Problem 9P
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Suppose that Abel and Eden spend their incomes on two goods, food (F) and clothing (C).
Abel’s preferences are represented by the utility function U(F,C)=10FC, while Eden’s
preferences are represented by the utility function U(F,C)= 0.20F2C2
A) With food on the horizontal axis and clothing on the vertical axis, identify on a graph the
set of points that give Abel the same level of utility as the bundle (10, 5). Do the same for
Eden on a separate graph.
B) On the same two graphs, identify the set of bundles that give Abel and Eden the same
level of utility as the bundle (15, 8).
C) Do you think Abel and Eden have the same preferences or different preferences? Explain
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