Question
Mead N. Taters likes only Steak (S) and potatoes (T), and gets utility from them according to: U = S 1/4 T 3/4 No matter
Mead N. Taters likes only Steak (S) and potatoes (T), and gets utility from them according to:
U = S1/4T3/4
No matter how much Mead has to spend on groceries and no matter what the prices of steak and potatoes are, he always spends (1)_________ % on steak and (2)________ % on potatoes.Thus, if Mead has $20.00 to spend on groceries, he will spend (3) $______ on steak and (4) $______ on potatoes.If the price of steak is $2.00 per pound and the price of potatoes, pt, is $.50 per pound, he will buy (5)______ pounds of steak and (6)________ pounds of potatoes.If the amount he has to spend on groceries, the price of steak, and the price of potatoes all double, he will then buy (7)______pounds of steak and (8)_______ pounds of potatoes.Would answers (7) and (8) change if Mead had any alternative "well-behaved" utility function like a CES utility function? (9)______.Why or why not? (10)____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.
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