Question: Consider a person whose preferences can be represented by the utility functionU=q1+q2 wherelies strictly between zero and 1. Given these preferences: Find the optimal choice

Consider a person whose preferences can be represented by the utility functionU=q1+q2

wherelies strictly between zero and 1. Given these preferences:

  1. Find the optimal choice of each good ifY=100 P1=2 P2=4and=0.5
  2. Give an economic interpretation for the parameterfrom the utility function (Hint: You might want to consider how the choice changes for a different price at different values of the parameter).

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