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The question is: the only quantities of good 1 that Barbie can buy are 1 unit or zero units. For x 1 equal to zero
The question is:
the only quantities of good 1 that Barbie can buy are 1 unit or zero units. For x1 equal to zero or 1 and for all positive values of x2, suppose that Barbie's preferences were represented by the utility function (x1 + 6)(x2 + 4). Then if her income were $16, her reservation price for good 1 would be:
I have done u1(0,16)=u2(1,m-Rp)
with then (0+6)(16+4)= 2(m-Rp-1)
Yet, I cant solve for reservation price
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