Asked by
Sistene Rose Labajo
on Dec 01, 2024
Verified
Ambrose's brother Bartholomew has a utility function U(x1, x2) = 40x1/21 + x2, where x1 is his consumption of nuts and x2 is his consumption of berries.His income is $115, the price of nuts is $5, and the price of berries is $1.How many units of berries will Bartholomew demand?
A) 35
B) 16
C) 70
D) 22
E) There is not enough information to determine the answer.
Utility Function
A representation of how consumer preferences over a set of goods and services are ordered, indicating the level of satisfaction derived from different bundles of goods.
Consumption
The action or process of using up goods and services, typically by households.
- Find the optimal solution for consumers when faced with budget limitations and item prices.
Verified Answer
MB
Learning Objectives
- Find the optimal solution for consumers when faced with budget limitations and item prices.