Donald derives utility from only two goods, carrots (X) and donuts (Y). His utility 0.1 0.9 Y Donald has an income (M) of $900 and the price of carrots (P) function is as follows: U(X,Y) =X and donuts (P) are $45 and $90 respectively. How will the bundle change when the price of carrot increased by $25 and the price of donut and income remain constant? Select one: A. Donald will now consume 1 unit of carrot and 10 units of donuts B. Donald will now consume 3 units of carrot and 2 units of donuts C. Donald will now consume 2 units of carrot and3 units of donuts D. Donald will now consume 2 units of carrot and 2 units of donuts O. E. Donald will now consume 1.3 units of donuts and 9.3 units of carrots F. Donald will now consume 2 units of carrot and 6 units of donuts G. Donald will now consume 1 unit of carrot and 1 unit of donuts H. Donald will now consume 1.3 units of carrots and 9.3 units of donuts
Donald derives utility from only two goods, carrots (X) and donuts (Y). His utility 0.1 0.9 Y Donald has an income (M) of $900 and the price of carrots (P) function is as follows: U(X,Y) =X and donuts (P) are $45 and $90 respectively. How will the bundle change when the price of carrot increased by $25 and the price of donut and income remain constant? Select one: A. Donald will now consume 1 unit of carrot and 10 units of donuts B. Donald will now consume 3 units of carrot and 2 units of donuts C. Donald will now consume 2 units of carrot and3 units of donuts D. Donald will now consume 2 units of carrot and 2 units of donuts O. E. Donald will now consume 1.3 units of donuts and 9.3 units of carrots F. Donald will now consume 2 units of carrot and 6 units of donuts G. Donald will now consume 1 unit of carrot and 1 unit of donuts H. Donald will now consume 1.3 units of carrots and 9.3 units of donuts
Chapter21: Demand: Consumer Choic
Section: Chapter Questions
Problem 1E
Related questions
Question
Transcribed Image Text:Donald derives utility from only two goods, carrots (X) and donuts (Y). His utility
0.1 0.9
Y
function is as follows: U(X,Y) =X
and donuts (P,) are $45 and $90 respectively. How will the bundle change when the price of carrot
increased by $25 and the price of donut and income remain constant?
. Donald has an income (M) of $900 and the price of carrots (P,)
Select one:
A. Donald will now consume 1 unit of carrot and 10 units of donuts
B. Donald will now consume 3 units of carrot and 2 units of donuts
C. Donald will now consume 2 units of carrot and3 units of donuts
D. Donald will now consume 2 units of carrot and 2 units of donuts
E. Donald will now consume 1.3 units of donuts and 9.3 units of carrots
F. Donald will now consume 2 units of carrot and 6 units of donuts
G. Donald will now consume 1 unit of carrot and 1 unit of donuts
H. Donald will now consume 1.3 units of carrots and 9.3 units of donuts
O.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps
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.Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
