A young connoisseur has $600 to spend to build a small wine cellar. She enjoys two vintages in particular: a 2001 French Bordeaux (xf) at $40 per bottle and a less expensive 2005 California varietal wine (xc) priced at $8. If her utility is U(xf, xc) = xf2/3xc1/3, then how much of each wine should she purchase?
A young connoisseur has $600 to spend to build a small wine cellar. She enjoys two vintages in particular: a 2001 French Bordeaux (xf) at $40 per bottle and a less expensive 2005 California varietal wine (xc) priced at $8. If her utility is U(xf, xc) = xf2/3xc1/3, then how much of each wine should she purchase?
Chapter21: Demand: Consumer Choic
Section: Chapter Questions
Problem 16E
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A young connoisseur has $600 to spend to build a small wine cellar. She enjoys two vintages in particular: a 2001 French Bordeaux (xf) at $40 per bottle and a less expensive 2005 California varietal wine (xc) priced at $8. If her utility is U(xf, xc) = xf2/3xc1/3, then how much of each wine should she purchase?
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