Videos & Activities to be integers: assume all variables (goods, prices) are infinitely divisible. Submit answers...
Instructions: Complete all questions. Show working for all parts. Answers do not have to be integers: assume all variables (goods, prices) are infinitely divisible. Submit answers in PDF format. 1. Alice enjoys consuming goods x and y. Where (x, y) is the consumption bundle and 0< a<1, Alice's utility is: (a) Originally, Alice has income m = 16, and faces prices pr-Py-1, and consumes a bundle at which her utility (subject to her budget) is maximised. Then, py rises to...
Is the answer to part (a) 2/3 or 1/2?
1. Alice enjoys consuming goods z and y. Where (x, y) is the consumption bundle and 0 < a < 1, Alice's utility is: u(z, y) -zy- (a) Originally, Alice has income m 16, and faces prices p Py1, and consumes a bundle at which her utility (subject to her budget) is maximised. Then, py rises to 4. Alice is sadder with the new bundle she chooses, and tells you that...