Question: 1. 2. Carla has utility function U(x, y) = 1x + 2y = over goods x and y c) What if Carla's budget drops to

1. 2. Carla has utility function U(x, y) = 1x + 2y

= over goods x and y c) What if Carla's budget drops

to $20? [Think about: could this utility function describe Carla's preferences over

bread and ice cream?] Bob has utility function U(x,y)=x2+y over goods x

Carla has utility function U(x, y) = 1x + 2y = over goods x and y c) What if Carla's budget drops to $20? [Think about: could this utility function describe Carla's preferences over bread and ice cream?] Bob has utility function U(x,y)=x2+y over goods x and y X c) What will happen if the price of good y doubles? [Think about: can we use this utility function to describe preferences over pet snakes and pet mice?]

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