1) Ambrose has the utility function U(x,x:) = 4x: + xX:. (X:: nuts, x:: berries). a) If Ambrose is initially consuming 25 units of nuts and 17 units of berries, then what is the largest number of berries that he would be willing to give up in return for an additonal 39 units of nuts? b) If Ambrose has an income of 30 liras, the price of nuts is 2 and the price of berries is 1 liras, what is the ordinary demand of Ambrose? What is the corresponding utility level?

1) Ambrose has the utility function U(x,x:) = 4x: + xX:. (X:: nuts, x:: berries). a) If Ambrose is initially consuming 25 units of nuts and 17 units of berries, then what is the largest number of berries that he would be willing to give up in return for an additonal 39 units of nuts? b) If Ambrose has an income of 30 liras, the price of nuts is 2 and the price of berries is 1 liras, what is the ordinary demand of Ambrose? What is the corresponding utility level?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter3: Preferences And Utility

Section: Chapter Questions

Problem 3.3P

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