Trigleater is a hungry individual in the Grossman model deciding what to have for dinner is looking at variable options. Trigleater has a special condition called "Eaterblood" where whatever she eats will affect her health almost immediately. The following table reflects the options she is considering and the effect on health Meal Home Good Z Health H Steak and eggs +9 -4 Kale salad and broccoli -5 +18 Double cheeseburger deluxe with coke 12 -18 If Trigleater's single period utility function is given by U=5Z+2H and she can only select one item from the table above. Allpositive is a new promising pharmaceutical company came with a new supplement "Bestofboth" that will halve the negative health effect and at the same time double the positive health effects. What would be the optimal selection if she takes Bestofboth supplement and what would be the maximum utility
Trigleater is a hungry individual in the Grossman model deciding what to have for dinner is looking at variable options. Trigleater has a special condition called "Eaterblood" where whatever she eats will affect her health almost immediately.
The following table reflects the options she is considering and the effect on health
Meal Home Good Z Health H
Steak and eggs +9 -4
Kale salad and broccoli -5 +18
Double cheeseburger deluxe with coke 12 -18
If Trigleater's single period utility function is given by U=5Z+2H and she can only select one item from the table above.
Allpositive is a new promising pharmaceutical company came with a new supplement "Bestofboth" that will halve the negative health effect and at the same time double the positive health effects.
What would be the optimal selection if she takes Bestofboth supplement and what would be the maximum utility
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Kale salad with broccoli max utility = 47 |
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Double Cheeseburger deluxe with coke max utility = 102 |
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Steak and eggs max utility=76 |
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Kale salad with broccoli max utility =59.5 |
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