Asked by
Raymond Yates
on Oct 14, 2024
Verified
Harry Mazzola has the utility function U(x1, x2) minx1 2x2, 2x1 x2.He has $40 to spend on corn chips and french fries.If the price of corn chips is $2 per unit and the price of french fries is $2 per unit, then Harry will
A) consume at least as many corn chips as french fries but might consume both.
B) definitely spend all of his income on corn chips.
C) consume at least as many french fries as corn chips but might consume both.
D) definitely spend all of his income on french fries.
E) consume equal amounts of french fries and corn chips.
Corn Chips
Snack food made from cornmeal fried or baked in oil, often seasoned, known for their crunchiness and popular as a party snack.
French Fries
Sliced potatoes that are deep-fried until golden brown and are often served as a side dish.
- Assess the effects of variations in pricing on the choices made by individuals regarding consumption when considering particular utility functions.
- Determine the ideal combination of goods to purchase within the limits of a budget and price points.
Verified Answer
AR
Learning Objectives
- Assess the effects of variations in pricing on the choices made by individuals regarding consumption when considering particular utility functions.
- Determine the ideal combination of goods to purchase within the limits of a budget and price points.