Question

d

Ist attempt See Hint The table below shows Khloe's purchases of truffles (x1) and oranges (x2) at varying levels of income. Assuming that Khloe is maximizing her utility, which utility function best represents her preferences? Consumption behavior truffles (lbs.) P1 (per lb.) oranges year P2 т 1.00 1 320.00 20 0.25 100 25 2 1.60 320.00 0.5 200 3 640.00 30 1.33 0.25 200 240.00 3.00 20 4 1 300 5 8.00 400.00 25 0.5 250 Choose one: A. xy.U B. 0.20x1+ 0.80x2 C. x20+0.80x2 D. x.8.u

Answer 1

After analysing the preferences of Khloe we can say that she has prefered the oranges for her.

The option B would follow the conditions.

Ans: 0.20x1+0.80x2