John spends all his money on leather jackets and hats. John’s utility function is given by U(x1, x2) = min{4x1,2x1+x2} where x1is the consumption of leather jackets and x2 is the consumption of hats. Suppose that John is making an optimal choice, and he consumes at the point (x1= 15, x2= 10). Moreover, the price of leather jackets (per unit) is $10. 1. Graph the indifference curve that passes through the point (15,10). 2. What must be the price of hats? 3. What is john’s total income?

John spends all his money on leather jackets and hats. John’s utility function is given by U(x1, x2) = min{4x1,2x1+x2} where x1is the consumption of leather jackets and x2 is the consumption of hats. Suppose that John is making an optimal choice, and he consumes at the point (x1= 15, x2= 10). Moreover, the price of leather jackets (per unit) is $10. 1. Graph the indifference curve that passes through the point (15,10). 2. What must be the price of hats? 3. What is john’s total income?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section6.A: Indifference Curve Analysis

Problem 1SQP

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