Homework Answers
according to the giiven information about howard's utility function and his consumption bundle his expected utility is 16*7*5= 560
similarly expected utility of dolly = 16+6=22
if we exchange the bundle then expected utility of Howard will be = 16*8*3=384 which is less than his actually utility thus Howard will always prefer his own consumption bundle
but for Dolly after exchanging tge bundle her utility will be = 2*7+2*5=24
thus she will prefer Howard's bundle than her
the correct option is Dolly prefers Howard's bundle but Howard prefers Howard's bundle.
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