Question
are parts d and w true or false and please explain why (d) A consumer has a utility function given by U=2*(C+W), where U is
are parts d and w true or false and please explain why
(d) A consumer has a utility function given by U=2*(C+W), where U is utility, C is chocolate and W is wine. The consumer has 20 and the price of a unit chocolate is 2 and the price of a unit of wine is 1. The indifference curves for this utility function are convex and the optimal consumption of chocolate and wine is C=5 and W=10.
(e) A woman wins the lottery and is set to receive 250,000 a year, every year, for the next (2+5) years. If the interest rate is 5% compounded annually, then the present value of the lottery win is (2+5)* 250,000 euro.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started