Prompt: Suppose we work at a supplement store where a tub of a carbohydrate supplement is...

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Prompt: Suppose we work at a supplement store where a tub of a carbohydrate supplement is $10, while the price of a protein supplement tub is $20. Furthermore, suppose we are assisting a regular customer where they informed us of having $100 currently that they want to fully use and that they have a ranking of 1. (6C,3P), 2. (6C, 2P), and 3. (6C, 1P) over carbohydrate and protein tubs. a) Which choice(s) in the customer's ranking are affordable? Additionally, which choice(s) in the customer's ranking are not affordable? (25pts) b) What choice maximizes the regular customer's utility? Why? (25pts) c) Suppose instead that the price of protein tubs has increased from $20 per tub to $40 per tub. What would happen to the regular customer's available choices for protein tubs? Additionally, based upon this change, the customer's income, and ranking, what would the customer's new utility maximizing combination of carbohydrate and protein tubs be? (25pts) d) Based upon the utility maximization choice in part c), is the regular customer better off or worse off compared to their utility maximizing choice in part b)? Why? (25pts) Prompt: Suppose we work at a supplement store where a tub of a carbohydrate supplement is $10, while the price of a protein supplement tub is $20. Furthermore, suppose we are assisting a regular customer where they informed us of having $100 currently that they want to fully use and that they have a ranking of 1. (6C,3P), 2. (6C, 2P), and 3. (6C, 1P) over carbohydrate and protein tubs. a) Which choice(s) in the customer's ranking are affordable? Additionally, which choice(s) in the customer's ranking are not affordable? (25pts) b) What choice maximizes the regular customer's utility? Why? (25pts) c) Suppose instead that the price of protein tubs has increased from $20 per tub to $40 per tub. What would happen to the regular customer's available choices for protein tubs? Additionally, based upon this change, the customer's income, and ranking, what would the customer's new utility maximizing combination of carbohydrate and protein tubs be? (25pts) d) Based upon the utility maximization choice in part c), is the regular customer better off or worse off compared to their utility maximizing choice in part b)? Why? (25pts)

Answer rating: 100% (QA)

a To determine which choices in the customers ranking are affordable we need to compare their available budget with the prices of the carbohydrate and ... View the full answer