Question: If Coke and Pepsi are perfect substitutes for Lynn. She is always willing to substitute 1.1

Fantastic news! We've Found the answer you've been seeking!

Question:

Question: If Coke and Pepsi are perfect substitutes for Lynn. She is always willing to substitute 1.1 Pepsis for 1 Coke. That is, her utility function is: U(Cokes, Pepsis)= 1.1*Cokes + Pepsis

If she has an income of $100 and the price of Cokes is $1.20 and Pepsis is $1, then what is the optimal bundle that Lynn should consume?

Related Book For answer-question

Microeconomics An Intuitive Approach with Calculus

ISBN: 978-0538453257

1st edition

Authors: Thomas Nechyba

See More Books

Posted Date: Mar 01, 2024 09:55 PM

See More Questions

Suppose Coke and Pepsi are perfect substitutes for me, and right and left shoes are perfect complements. A. Suppose my income allocated to Coke/Pepsi consumption is $100 per month, and my income...
CANMNMM January of this year. (a) Each item will be held in a record. Describe all the data structures that must refer to these records to implement the required functionality. Describe all the...
2. Consider the following four consumers (C1,C2,C3,C4) with the following utility functions: Consumer Utility Function C1 u(x,y) = 2x+2y C2 u(x,y) = x^3/4y^1/4 C3 u(x,y) = min(x,y) C4 u(x,y) =...
In your hometown what system is used to price the publicly supplied water? Why was that pricing system chosen? Would you recommend an alternative?
The unadjusted trial balance of Mesa Inc., at the company's year end of December 31, follows: Additional information and adjustment data: 1. The 12-month insurance policy was purchased and was...
Two lenses, separated by a distance of 21.0 cm, are used in combination. The first lens has a focal length of +30.0 cm; the second has a focal length of 15.0 cm. An object, 2.0 mm long, is placed 1.8...
CD Real Estate specializes in residential real estate services in the state of California. To complement the experience and local market knowledge of its licensed realtors, CD Real Estate wants to...
The perpetual inventory records of the Park Company indicate the following transactions in the month of June: Required Compute the cost of goods sold for June and the inventory at the end of June,...
Examine how projects generate revenues, expenses, and uses of cash. Discuss how an income statement and a cash flow statement can be used within managing a project. Describe any current reports used...
The variable rdintens is expenditures on research and development (R&D) as a percentage of sales. Sales are measured in millions of dollars. The variables profmarg is profits as a percentage of...
State that whether the following statements are true or false. 1. The difference between a program and a process is that a program is an active entity while a process is a passive entity.
In the United States, where Internet services are cheap, the ratio of capital to labor used is higher than that of capital used in accounting services. But in other countries, where Internet services...
Answer the following question based on the information presented for Cloud 9 in Appendix A and in the current and earlier chapters. You should also consider your answers to the Cloud 9 case study...
Barbara Bliss had the following recognized gains and losses during 2018: What are the net tax consequences of these gains and losses for Barbara? Barbara's adjusted gross income is $\$ 30,000$...
If the continuously compounded interest rate is a constant $r$, what is the instantaneous forward interest rate (see Formula 4.5)?
Stenton Toys Ltd. is a toy retailer with stores in each of the Canadian provinces. Stenton has a head office and a central warehouse in Mississauga, Ontario. All inventory purchases are made...
A product is currently made in a process-focused shop, where fixed costs are $16,000 per year and variable cost is $25 per unit. The firm sells the product for $80 per unit. What is the profit (or...
Give an example of transitory income. What effect does this income have on the marginal propensity to consume?
In this exercise, you will prove that, as long as tastes satisfy rationality, continuity and monotoni city, there always exists a well-defined indifference map (and utility function) that can...
While we often think of Pirates as a thing of the past, piracy in international waters has been on the rise. Typically, pirates seize a commercial vessel and then demand a monetary ransom to let go...
In the Appendix to Chapter 17, we introduced the Allais Paradox. It went as follows: Suppose there are three closed doors with $5 million, $1 million and $0 behind them. You are first offered a...
An amorphous material is: (a) Mica (b) Lead (c) Rubber (d) Glass
Discuss the application vernier caliper and its method of measurement.
In center lathe, cutting tool is fed in ____ directions with reference to the lathe axis.

Question: If Coke and Pepsi are perfect substitutes for Lynn. She is always willing to substitute 1.1

Question:

Expert Answer:

To find the optimal bundle that Lynn should consume we need to maximize her utility subject to her b... View the full answer

Microeconomics An Intuitive Approach with Calculus

Students also viewed these economics questions