Laura has an income of 100 and she has to spend it to buy daisies (x₁) and daffodils(x₂). Her preferences are represented by a Cobb Douglas utility function U(X₁,X₂)X₁X2.1 daisies are twice as expensive as the daffodils, what would her optimal bundle be? O Buy only daffodils O Buy only daisies O Buy twice as many daffodils as daisies O Buy twice as many daisies as daffodils O Buy same amount of daisies and daffodils O No answer.
Laura has an income of 100 and she has to spend it to buy daisies (x₁) and daffodils(x₂). Her preferences are represented by a Cobb Douglas utility function U(X₁,X₂)X₁X2.1 daisies are twice as expensive as the daffodils, what would her optimal bundle be? O Buy only daffodils O Buy only daisies O Buy twice as many daffodils as daisies O Buy twice as many daisies as daffodils O Buy same amount of daisies and daffodils O No answer.
Chapter10: Consumer Choice Theory
Section: Chapter Questions
Problem 8P
Related questions
Question
Transcribed Image Text:9 of 15
Laura has an income of 100 and she has to spend it to buy daisies (x₁) and daffodils (x2). Her preferences are represented by a Cobb Douglas utility function u(x1,x2)= x1x2. If
daisies are twice as expensive as the daffodils, what would her optimal bundle be?
O Buy only daffodils
O Buy only daisies
O Buy twice as many daffodils as daisies
O Buy twice as many daisies as daffodils
O Buy same amount of daisies and daffodils
O No answer.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
