Martha loves to eat chili, especially an award-winning chili recipe that calls for using 2 tablespoons of chili powder for every
1 pound of ground buffalo. Which of the following utility functions could represent Martha's preferences, where U is a function of tablespoons of chili powder (P) and pounds of ground buffalo (B)?
(A) U=min{2B, P}
(B) U=min{1/2B, P}
(C) U= 2P+B
(D) U=2PB
(A) U=min{2B, P}
(B) U=min{1/2B, P}
(C) U= 2P+B
(D) U=2PB
2 answers:
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Answer:
Follows are the solution to the given points:
Explanation:
In point a:
This business of plastic containers is increasing its Lunchbox Product Signature price around $3.00 and $4.00. The volumes produced consequently declined around 20,000 to 15,000.
The price elasticity also becomes unitary
In point b:
U.S. economic theory states that the elasticity of fuel demand is 0.5 because prices would be less than 1 and so are non-elastic.
In point c:
The capital Metro agrees and add $2.00 to $2.21 also for bus fares. Consequently, with an average of 70,000 drivers a days to both a daily average 61,000 drivers, its passenger numbers who take the bus in Austin falls.
The value being higher than 1 is elastic.