Asked by
Antonio Davis
on Dec 01, 2024Verified
Ambrose's utility function is = 4x1/21 + x2.If the price of nuts (good 1) is $1, the price of berries (good 2) is $5, and his income is $190, how many units of berries will Ambrose choose?
A) 36
B) 101
C) 18
D) 17
E) 21
Utility Function
A representation of how consumer satisfaction varies with the consumption of different goods or services.
Budget Constraint
A representation of all the combinations of goods and services that a consumer can afford with their income level, given the prices of these goods and services.
Nuts
Edible seeds or fruits with a hard shell, often used as a source of food or oil.
- Use the maximization of utility principle to ascertain the optimal mix of consumption items.
- Assess the consequences of price variations on the selection of consumption options.
Verified Answer
SC
Learning Objectives
- Use the maximization of utility principle to ascertain the optimal mix of consumption items.
- Assess the consequences of price variations on the selection of consumption options.