Question
5)MarkhaspreferencesbetweengunsandbanjosthataredescribedbytheutilityfunctionU(B,G)=G + B^1/2. Assume that both goods can be consumed in fraction. a. Whatistheoptimalconsumptionbundle (i.e. demanded bundle), ifp G =$4,p B =$1 andI=$16? b. Whatistheoptimalconsumptionbundleifp
5)MarkhaspreferencesbetweengunsandbanjosthataredescribedbytheutilityfunctionU(B,G)=G + B^1/2. Assume that both goods can be consumed in fraction.
a.Whatistheoptimalconsumptionbundle (i.e. demanded bundle), ifpG=$4,pB =$1 andI=$16?
b.WhatistheoptimalconsumptionbundleifpG =$4,pB =$1 andI=$2?
c.Find Mark's individual demand of Banjo as a function of price of banjo (pB), price of gun (pG) and income (I).
d.Are two goods substitutes, complements or neither?
e.Draw the Engel curve at pG =$4,pB =$1.
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Business Law
Authors: Henry Cheeseman
8th Edition
0133130649, 9780133130645
