Question

In: Economics

a) Mick’s utility is ?(?, ?) = ? + √?. He tells you that (20,9)~(15, ?)....

a) Mick’s utility is ?(?, ?) = ? + √?. He tells you that (20,9)~(15, ?). What’s y?

b) In the course, I’ve mentioned ?(?, ?) ≔ 2? + 5? + 8 ∙ ??? ( ? 3 , ? 7 ) + 11? 0.4? 0.6 an example of a more complicated homogeneous utility function. In the space below, prove to me (from the definition) that this utility function is homogeneous.

c) In the space below, draw a generic picture of a perfect substitutes consumer that has a corner solution (at the upper-left corner). Be sure to clearly label the consumer’s budget line and his indifference curve(s).

d) Suppose that Tara’s endowment is (100,25), good x is the numéraire, and ?? = 13. What is the y-intercept of Stefani’s budget line?

Solutions

Expert Solution

Rahul Sunny answered 1 year ago
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