Question
Sim has utility function U B (X 1 ,X 2 )=(X 1 +2)(X 2 +3). He also has income m, and faces prices P 1
Sim has utility function UB(X1,X2)=(X1+2)(X2+3). He also has income m, and faces prices P1 and P2 for goods 1 and 2 respectively.
What is Jamal's MRS of good 1 for good 2?
What is his optimal choice of goods 1 and 2 as functions of his income and prices?
Kendra has utility function UA(X1,X2)=[(X1+2)(X2+3)]2. She has the same income as Sim, and faces the same prices. Find her optimal consumption bundle.
A third consumer, Linda has preferences(1,2)=(1+2)2(2+3) and the same income as Sim and Kendra. Find her optimal consumption bundle.
How does Linda's consumption differ from Kendra's?
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