Question
Your longtime childhood friend Ola eats only Ohrid trout (good 1) and salmon (good 2), and her preferences are such that - given a choice
Your longtime childhood friend Ola eats only Ohrid trout (good 1) and salmon (good 2), and her
preferences are such that - given a choice between two bundles - she always prefers the bundle
that weighs more in total. Let x1 and x2 denote kilograms of trout and salmon, respectively. We
want to show that the following function is a utility function for Ola:
U (x1, x2) = x1+ x2
a. What utility numbers does this function assign to the following six bundles: (10,15), (20,30),
(25,0), (15,15), (20,15), (40,10). Show the preference relations of Ola for the above-mentioned
bundles.
b. More generally, show that this function is a utility function for Ola. To do so, argue why the
answer to each of the following questions is "yes". Question 1: Does this function assign the
same utility number to two bundles whenever Ola is indifferent between them? Question 2: Does
this function assign a larger utility number to the preferred bundle when Ola prefers one bundle
to another? Question 3: Does this function assign a utility number to all consumption bundles
that contain trout and salmon?
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