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C. Carol consumes cheese, x, and cocoa, y. Cocoa is sold in an unusual way: a units of cocoa will cost Dan a² dollars. Cheese is sold in the usual way at a price of 2 dollars per unit. Carol's income is 100 dollars and her utility function is U(x, y) : = x + 2y. • Set up and solve Carol's maximization problem. • Draw Carol's budget set and some of her indifference curves and label the bundle she chooses.

C. Carol consumes cheese, x, and cocoa, y. Cocoa is sold in an unusual way: a units of cocoa will cost Dan a² dollars. Cheese is sold in the usual way at a price of 2 dollars per unit. Carol's income is 100 dollars and her utility function is U(x, y) : = x + 2y. • Set up and solve Carol's maximization problem. • Draw Carol's budget set and some of her indifference curves and label the bundle she chooses.

Microeconomic Theory
Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.7P
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C. Carol consumes cheese, x, and cocoa, y. Cocoa is sold in an unusual way: a units of cocoa will cost Dan a² dollars. Cheese is sold in the usual way at a price of 2 dollars per unit. Carol's income is 100 dollars and her utility function is U (x, y) = x + 2y. • Set up and solve Carol's maximization problem. • Draw Carol's budget set and some of her indifference curves and label the bundle she chooses.
Transcribed Image Text:C. Carol consumes cheese, x, and cocoa, y. Cocoa is sold in an unusual way: a units of cocoa will cost Dan a² dollars. Cheese is sold in the usual way at a price of 2 dollars per unit. Carol's income is 100 dollars and her utility function is U (x, y) = x + 2y. • Set up and solve Carol's maximization problem. • Draw Carol's budget set and some of her indifference curves and label the bundle she chooses.
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