Question
Robert and Obeid both like blueberries and raspberries. Let X denote the number of packets of blueberries consumed, while Y denotes the number of packets
Robert and Obeid both like blueberries and raspberries. Let X denote the number of packets
of blueberries consumed, while Y denotes the number of packets of raspberries consumed.
Robert is indifferent between consuming a packet of blueberry and raspberry , Obeid prefers
a packet of blueberry thrice as much as a packet of raspberry.
a) (2 points) Write a utility function that represents Robert's preferences between commod-
ity bundles comprised of packets of blueberries and raspberries.
b) (2 points) Now, write a utility function that represents Obeid's utility function.
c) (2 points) Would the utility function U(X, Y ) = 100X + 300Y represent Obeid's prefer-
ences? Would the utility function U(X, Y ) = log(300X + 100Y ) represent Obeid's prefer-
ences? (Explain your answer briefly).
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