wo grad students go out to lunch and decide to split the bill evenly between them. Each student has a quasi-linear utility function given by ui(fi, xi) = φi(fi)+xi, where φi(·) is strictly concave, fi is the amount of food consumed by student i, and xi is a composite numeraire good. Each student has a fixed budget of mi. EVALUATE THIS CLAIM: Both students eat too much!
wo grad students go out to lunch and decide to split the bill evenly between them. Each student has a quasi-linear utility function given by ui(fi, xi) = φi(fi)+xi, where φi(·) is strictly concave, fi is the amount of food consumed by student i, and xi is a composite numeraire good. Each student has a fixed budget of mi. EVALUATE THIS CLAIM: Both students eat too much!
Chapter7: Consumer Choice: Maximizing Utility And Behavioral Economics
Section: Chapter Questions
Problem 6QP
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Two grad students go out to lunch and decide to split the bill evenly
between them. Each student has a quasi-linear utility function given by
ui(fi, xi) = φi(fi)+xi, where φi(·) is strictly concave, fi is the amount
of food consumed by student i, and xi is a composite numeraire good.
Each student has a fixed budget of mi. EVALUATE THIS CLAIM:
Both students eat too much!
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