Jerry Seinfeld derives utility from only two goods: Puffy shirts (X) and cereal (Y). His utility function is: U = XY'. The price

Question

3 years ago

9

Jerry Seinfeld derives utility from only two goods: Puffy shirts (X) and cereal (Y). His utility function is: U = XY'. The price

of X is $10, the price of Y is $20, and Jerry has an income of $500. Suppose the price of Puffy Shirts increased to $20. The compensated bundle is (2.6794, 24.1149). How much is the total effect, on X, of the price change?

Business

1 answer:

Sladkaya [172] · Answer 1 · 2022-12-14T13:19:09+03:00

Sladkaya [172]3 years ago

7 0

Answer:

Hope this helps

Explanation:

His utility function is U=XY9. The price of X is 10 dollars and the price of Y is 20 dollars and Jerry has an income of 500 dollars. Suppose the price of Puffy Shirts increased to 20 dollars. The compensated bundle is 2.6794, 24.1149.