Question
Nadia likes spare ribs, R, and fried chicken, C. Her utility function is U(R,C)=50R^2C Her weekly income is $360, which she spends on only ribs
Nadia likes spare ribs, R, and fried chicken, C. Her utility function is U(R,C)=50R^2C Her weekly income is $360, which she spends on only ribs and chicken. Her marginal utilities are MUR = 100RC and MUC= 50R^2 and her budget constraint is 360= 40.00R+20.00C If she spends $40.00 for a slab of ribs and $20.00 for a chicken, what is her optimal consumption bundle? Nadia's optimal value of ribs is R equals 6 units and her optimal value of chicken is C equals 6 Units
Suppose the price of chicken increases to $80.00 How does her optimal consumption of chicken and ribs change?
Nadia's optimal value of ribs is R= ____ units ? and her optimal value of chicken is C= ____units ?
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Managerial Economics and Strategy
Authors: Jeffrey M. Perloff, James A. Brander
1st edition
978-0137036059, 133379094, 321566440, 137036051, 9780133379099, 978-0321566447
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