Suppose you get two job offers when you graduate. First offer is in LA and pays $6000 per month. The price of food in LA is $3 and price of housing is $5. The second offer is in San Francisco and pays $10000. Both food and housing is more expensive in SF at PF = 4 and PH = 6 respectively. If your utility function is U (F, H) = F1/4 H 3/4 which job offer should you accept?

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Q: O more

A:

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Q: consumer’s utility function

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A:

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Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.