Helen buys 2 goods: clothing (x) and food (y). One unit of clothing costs $15, while one unit of food costs $5. Helen has a budget of $100. 1. Suppose her preferences are represented by the utility function U(x, y) = lnxy. Using optimization techniques, determine Helen’s optimal bundle and illustrate graphically 2. Suppose her preferences are represented by the utility function U(x, y) = 10lnx+y. Determine Helen’s optimal bundle and illustrate graphically 3. Suppose her preferences are represented by the utility function U(x, y) = 10lnx + y, but now the price of food increases to $15, while the price of clothing remains at $15. Determine Helen’s optimal bundle and illustrate graphically
Helen buys 2 goods: clothing (x) and food (y). One unit of clothing costs $15, while one unit of food costs $5. Helen has a budget of $100. 1. Suppose her preferences are represented by the utility function U(x, y) = lnxy. Using optimization techniques, determine Helen’s optimal bundle and illustrate graphically 2. Suppose her preferences are represented by the utility function U(x, y) = 10lnx+y. Determine Helen’s optimal bundle and illustrate graphically 3. Suppose her preferences are represented by the utility function U(x, y) = 10lnx + y, but now the price of food increases to $15, while the price of clothing remains at $15. Determine Helen’s optimal bundle and illustrate graphically
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Helen buys 2 goods: clothing (x) and food (y). One unit of clothing costs $15, while one unit of food costs $5. Helen has a budget of $100.
1. Suppose her preferences are represented by the utility function U(x, y) = lnxy. Using optimization techniques, determine Helen’s optimal bundle and illustrate graphically
2. Suppose her preferences are represented by the utility function U(x, y) = 10lnx+y. Determine Helen’s optimal bundle and illustrate graphically
3. Suppose her preferences are represented by the utility function U(x, y) = 10lnx + y, but now the
Helen’s optimal bundle and illustrate graphically
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