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In: Economics

Mandy drinks cranberry juice and vodka in fixed proportions. Her utility function is of the following...

  1. Mandy drinks cranberry juice and vodka in fixed proportions. Her utility function is of the following form:

    U =min{ 84 Cranberry Juice, 92 Vodka}

    The price of vodka is $32 per ounce, the price of cranberry juice is $50 per ounce and her income is $4,561.

    What is Mandy's amount of maximized utility?

QUESTION 23

  1. Mandy gets utility from consuming nutella and doritos. Her utility function is of the following form:

    U = 110 Doritos + 24 Nutella

    The price of nutella is $95 per jar, the price of doritos is $6 per bag and her income is $7,494

    What is Mandy's optimal consumption amount of nutella?

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
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