Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

21. What utility function does NOT represent the preferences of an individual over soda (S) and ice (1), where the individual only enjoys ice-cold glasses

image text in transcribed
21. What utility function does NOT represent the preferences of an individual over soda (S) and ice (1), where the individual only enjoys ice-cold glasses of soda (or fractions of ice-cold glasses of soda). To make a proper ice-cold glass of soda, the soda and ice must be in a 1:3 ratio. For instance, 1.5 sodas and 4.5 ice cubes would make 1.5 glasses of ice-cold soda. (Assume S and I take positive values only.) A. U(S, I) =min(3S, I) B. U(S,I)=min(S. c. U(S, I) =(min(1.5S, - 2 D. A-C are all valid representations E. A-C contains no valid representations

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Environmental Markets A Property Rights Approach

Authors: Terry L Anderson, Gary D Libecap

1st Edition

0521279658, 9780521279659

More Books

Students also viewed these Economics questions