Harriet enjoys watching both American Idol and Desperate Housewives on television. Her preferences correspond to the utility function U(A,D) = 2A + 4√D, where A stands for the number of ours she watches American Idol and D is the number of hours she watches Desperate Housewives.
a. How would Harriet rank the following alternatives: 4 hours of American Idol and 2 hours of Desperate Housewives, 2 hours of American Idol and 4 hours of Desperate Housewives and 3 hours of American Idol and 3 hours of Desperate Housewives?
b. Suppose that one week, Desperate Housewives is not shown, but there is a two-hour American Idol special (instead of the usual one-hour program). Is Harriet better off or worse off? Explain.
c. Would Harriet's preferences change if her utility function was expressed as U(A,D) = 2A + 4√D+6? Why or why not?

  • CreatedAugust 05, 2013
  • Files Included
Post your question