If utility is given by U(x, y) = x2 + y2 and px = 2, py = 3, I = 50, this person will choose: a. (10, 10). b. (15, 6.67). c. (25, 0). d. (0, 50/3).
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If utility is given by U(x, y) = x2 + y2 and px = 2, py = 3, I = 50, this person will choose:
a. (10, 10).
b. (15, 6.67).
c. (25, 0).
d. (0, 50/3).
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- 4 Part Question on Caesar * * PART 1 * * Caesar has preferences that are described by the utility function u = 3x 1 + 5x 2. Caesar strictly prefers the bundle (x 1, x 2) = (0, 6.6) to the bundle A. (3, 3) B. (5, 3.6) C. (0, 8.4) D. (11, 1.8) E. (8, 3.60) * * PART 2 * * What is the functional form of Caesar’s preferences, or indifference curves? A. Linear (perfect substitutes) B. Leontief (perfect complements) C. Satiation D. Concave, but not strictly concave E. Cobb-Douglas * * PART 3 * * Caesar’s preferences are A. strictly convex. B. definitely not well-behaved. C. definitely well-behaved. D. strictly concave. E. neutral. * * PART 4 * * Caesar has been consuming the bundle (x 1, x 2) = (10, 2.4). At this point, what is the marginal rate of substitution? A. – 0.25 B. –0.6 C. – 1.67 D. – 3.0 E. – 5.0.A consumer is having a monotonic preference. What can you say about his preference on these bundles (10,10) (10,9) (9,9)Problem 1 Jane has the following utility function: u(w) w^.5 or the square root. function Which of the following prospects would she prefer? P1(.4, 3,000, 600) P2(.7, 1,200, 1,000) P3(.6, 2,000, 100)
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