Asked by
Gracey Rutherford
on Oct 14, 2024Verified
Ambrose's brother Anthony has an income of $75 and a utility function U(x1, x2) 20x1/21 x2.The price of good 1 (nuts) is $2 and the price of good 2 (berries) is $1.How many units of nuts will Anthony demand?
A) 35
B) 21
C) 23
D) 25
E) 48
Utility Function
Represents the satisfaction or welfare an individual obtains from consuming goods and services, indicating preferences over various bundles of goods.
Nuts
Specifically, types of fruit composed of a hard shell and a seed, which are generally rich in nutrients.
Berries
Small, juicy fruits with a high seed content, often colorful and consumed as food; includes strawberries, blueberries, raspberries, and many others.
- Analyze utility functions with the aim of determining the most favorable consumption levels.
- Examine utility maximization's role in shaping the demand function for a spectrum of products.
Verified Answer
LV
Learning Objectives
- Analyze utility functions with the aim of determining the most favorable consumption levels.
- Examine utility maximization's role in shaping the demand function for a spectrum of products.