Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Veronica likes to plant owers in pots and she views soil [x] and pots (y) as perfect complements. She must have 4 units of x

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
Veronica likes to plant owers in pots and she views soil [x] and pots (y) as perfect complements. She must have 4 units of x for every 1 unit of y. Which of the following could describe her utility? O U=x+025y O U=D.25x+y O U=min[x,0.25v) O U=min[0.25x,y] Consider a utility function for perfect complements, U=min(2x,y). Assume that the price of x is equal to $1, the price of y is equal to $2 and income is equal to 30. What is the optimal amount of x that this person should consume? [Note this question is only asking about the optimal amount of x. You don't need to provide the optimal amount of y.] 42 pts Question 4 Consider the utility function U = In a + y. What is the equation for the optimal consumption of y in terms of Pr; Py; I. Oy = I-PE Px I-Px Py O I-Py O I-Py y = PyQuestion 5 2 pts Consider again the utility function U = In a + y. If the price of x is 2 and the price of y is 1, how much income does this person have to have to be able to afford the optimal x

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

World Economic And Social Survey 2012 In Search Of New Development Finance

Authors: United Nations Department Of Economic And Social Affairs

1st Edition

9210555112, 9789210555111

More Books

Students also viewed these Economics questions

Question

Detailed note on the contributions of F.W.Taylor

Answered: 1 week ago