1. Consumer choice problems: (a) Paul likes to eat lunch at school. He only likes Twinkies...
1. Consumer choice problems:
(a) Paul likes to eat lunch at school. He only likes Twinkies (t)
and soda (s), and these provide him a utility of u(t, s) = √(ts).
If Twinkies cost $0.10 each and soda costs $0.25 per cup, how
should Paul spend the $1 his mother gives him every day?
(b) George likes breakfast tacos and milk. His utility is given by u(t, m) = t + 5 ln(m). Suppose tacos and milk both cost $1 a piece. How should George spend the $4 he has set aside for breakfast?
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1. Consumer choice problems:
(a) Paul likes to eat lunch at school. He only likes Twinkies...
Each day Paul, who is in third grade, eats lunch at school. He likes only Twinkies...
Each day Paul, who is in third grade, eats lunch at school. He likes only Twinkies (t) and soda (s), and these provide him a utility of: utility = U(t,s) = Suppose the price of twinkies is P each and the price of soda is Ps per cup. Also suppose Paul has I, given to him by his mother, to spend on lunch at school For this general case, which of the following are first order conditions for a utility...
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Each day Paul, who is in third grade, eats lunch at school. He likes only Twinkies (t) and soda (s), and these provide him a utility of: utility = U(t,s) = Suppose the price of twinkies is P each and the price of soda is Ps per cup. Also suppose Paul has I, given to him by his mother, to spend on lunch at school For this general case, which of the following are first order conditions for a utility...
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