There are two goods and John's preferences can be represented by u: R30→R given by u(x) = x₁x₂. His income and price of the two goods are given by (M, P₁ P2) = (12, 1, 2). Which 2 of the following 8 options are false: In John's optimal bundle, he consumes the same amount of good 1 as good 2. If we change John's utility function to u(x) = x + x then John's optimal bundle remains unchanged. At John's optimal bundle, the slope of the budget constraint equals the slope of the indifference curve.
There are two goods and John's preferences can be represented by u: R30→R given by u(x) = x₁x₂. His income and price of the two goods are given by (M, P₁ P2) = (12, 1, 2). Which 2 of the following 8 options are false: In John's optimal bundle, he consumes the same amount of good 1 as good 2. If we change John's utility function to u(x) = x + x then John's optimal bundle remains unchanged. At John's optimal bundle, the slope of the budget constraint equals the slope of the indifference curve.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![12
There are two goods and John's preferences can be represented by u: R²0 R given by u(x) = x₁³x2³. His income and price of the two goods are given by (M, P1,
20
P2) = (12, 1, 2).
Which 2 of the following 8 options are false:
In John's optimal bundle, he consumes the same amount of good 1 as good 2.
If we change John's utility function to u(x) = x + then John's optimal bundle remains unchanged.
At John's optimal bundle, the slope of the budget constraint equals the slope of the indifference curve.
In John's optimal bundle, he spends the same amount on good 1 as good 2.
John's preferences satisfy local non-satiation.
At John's optimal bundle, his bang per buck of good 1 equals his bang per buck of good
If we change John's utility function to u(x) = In (17 +x₁x₂) then John's optimal bundle remains unchanged.
If we change the budget set to (M, P1, P2) = (24, 2, 4) then John's optimal bundle remains unchanged.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5a7d6291-bcbd-4d13-86a4-a5f4e32dd072%2Ff8255832-6cc1-4b8a-b954-0fc697abe2be%2F96mpgf_processed.png&w=3840&q=75)
Transcribed Image Text:12
There are two goods and John's preferences can be represented by u: R²0 R given by u(x) = x₁³x2³. His income and price of the two goods are given by (M, P1,
20
P2) = (12, 1, 2).
Which 2 of the following 8 options are false:
In John's optimal bundle, he consumes the same amount of good 1 as good 2.
If we change John's utility function to u(x) = x + then John's optimal bundle remains unchanged.
At John's optimal bundle, the slope of the budget constraint equals the slope of the indifference curve.
In John's optimal bundle, he spends the same amount on good 1 as good 2.
John's preferences satisfy local non-satiation.
At John's optimal bundle, his bang per buck of good 1 equals his bang per buck of good
If we change John's utility function to u(x) = In (17 +x₁x₂) then John's optimal bundle remains unchanged.
If we change the budget set to (M, P1, P2) = (24, 2, 4) then John's optimal bundle remains unchanged.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
Recommended textbooks for you
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education