Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 1. Suppose Natalia's utility function is u(x1, x2) = 5x 2 +2x 1 a) What kind of utility function does she has? (2 points)
Question 1. Suppose Natalia's utility function is u(x1, x2) = 5x2+2x1
a) What kind of utility function does she has? (2 points)
b) Draw one indifference curve with a utility of 100 (put x1 is on the horizontal axis). (6 points) Label two points on this utility curve. (2 points)
c) In order to keep her utility constant, when Natalia increases consumption of x1 by one unit, how many units of x2 she has to give up? Explain. (4 points)
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