Question: Consider a person whose preferences can be represented by the utility functionU=q1^a+q2^a wherea lies strictly between zero and 1. Find the optimal choice of each

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

where"a" lies strictly between zero and 1.

Find the optimal choice of each good if

Y=1000

P1=2

P2=4

anda=0.5

Give an economic interpretation for the parameter"a" from 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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Pollution