2. Suppose that Collette is a Cobb-Douglas agent who always spends 25% of her income on...

2. Suppose that Collette is a Cobb-Douglas agent who always spends 25% of her income on good x. In words, explain how you would use Excel to create a plot Collette’s indifference curve passing through the bundle (15,12). Extra Credit: if you have time left at the end of the exam, actually do what you just said and submit your .xlsx file.

Suppose I give you the utility function ?(?, ?) = 2? + 3? + ? 0.35? 0.65, where the agent is a “blend” of perfect substitutes and Cobb-Douglas. If I give you actual numbers for the market prices (?? = 8.24, ?? = 17.51) and the agent’s wealth (? = 1500), tell me a practical plan for how you would try to calculate the agent’s demanded bundle (using Excel, say). Extra Credit: If you have time left at the end of the exam, actually do what you just said and submit your .xlsx file

Is there anyway you could show how to do it in excel? Thanks for showing me.

Expert Solution

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Rahul Sunny answered 2 years ago

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