Question
For every two boxes of strawberries that she consumes, Millicent insists on having one pitcher of cream. She does not, however, insist on consuming the
For every two boxes of strawberries that she consumes, Millicent insists on having one pitcher of cream. She does not, however, insist on consuming the same amount every week. Her utility functions isU=min{s1, 2c1}min{s2, 2c2}, wheres1ands2are the number of boxes of strawberries she consumes this week and next week andc1andc2are the number of pitchers of cream she consumes this week and next. Strawberries cost $2 a box and cream costs $1 a pitcher. She has a present value of $100 to spend on these goods in the next two weeks. The weekly interest rate is 1%. How many boxes of strawberries will she consume this week?
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