Question
1. Xiyangyang at Jia Chang's: (a) From the text in Section 9.1, suppose that Xiyangyang returned to Jia Chang's Homestyle Restaurant yesterday but only had
1. Xiyangyang at Jia Chang's:
(a) From the text in Section 9.1, suppose that Xiyangyang returned to Jia Chang's Homestyle Restaurant yesterday but only had $18 with him. His utility is still U = ln(D)+ ln(M) and the price of dumplings remains $1 and the price of mooncakes remains $2. Set up and solve his UMP.
(b) Suppose that Xiyangyang left Jia Chang's yesterday less than satisfied be-cause he did not get enough food. Xiyangyang feels he could have been 25% happier, i.e. recieved 25% more utility than he did yesterday.
Using your solutions from part (a) determine the level of utility that Xiyangyang wants, then solve his EMP to obtain that utility level. (c) Compare your answers for D and M from part a and part b. Are they the same? Why or why not?
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