Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.8P: Find utility functions given each of the following indifferencecurves [defined by U()=k ]: a....
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Consider the following utility function, utility = x·y. The equation for the indifference curve at utility level equal to 20 is?
Expert Solution
Step 1
Utility means the satisfaction that a consumer gains from consuming a product or service. Utility function measures preferences of a consumer over a set of goods and services. And an indifference curve shows combinations of two commodities. A person is always indifferent when choosing one bundle from the many combinations that he has on a particular indifference curve. A person’s utility throughout the indifferent curve is same.
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