Donna and Jim are two consumers purchasing strawberries and chocolates. Jim’s utility function is U (x, y) = xy and Donna’s utility function is U (x, y) = x2y where x denotes strawberries and y denotes chocolates. Jim’s marginal utility functions are MUX=y and MUy=x while Donna’s are MUX=2xy and MUy=x2 . Jim’s income is $100, and Donna’s income is $150. What is the optimal bundle for Donna if the price of strawberries is $2 and the price of chocolate is $4? What is the optimal bundle for Jim, and for Donna, when the price of strawberries rises to $3?
Donna and Jim are two consumers purchasing strawberries and chocolates. Jim’s utility function is U (x, y) = xy and Donna’s utility function is U (x, y) = x2y where x denotes strawberries and y denotes chocolates. Jim’s marginal utility functions are MUX=y and MUy=x while Donna’s are MUX=2xy and MUy=x2 . Jim’s income is $100, and Donna’s income is $150. What is the optimal bundle for Donna if the price of strawberries is $2 and the price of chocolate is $4? What is the optimal bundle for Jim, and for Donna, when the price of strawberries rises to $3?
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 11SQ
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Question
Donna and Jim are two consumers purchasing strawberries and
chocolates. Jim’s utility function is U (x, y) = xy and Donna’s utility
function is U (x, y) = x2y where x denotes strawberries and y denotes
chocolates. Jim’s
Donna’s are MUX=2xy and MUy=x2
. Jim’s income is $100, and Donna’s
income is $150. What is the optimal bundle for Donna if the price of
strawberries is $2 and the price of chocolate is $4? What is the optimal
bundle for Jim, and for Donna, when the price of strawberries rises to
$3?
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