Question 6

4 points Save Answer

Consider Billie, whose preferences are either Perfect Substitutes, Perfect Complements or Cobb-Douglas with parameter a, allocating a given

endowment between two goods whose prices are p and 1 respectively. Billie's endowments of the two goods are 10 and 50 units respectively.

In the first situation p was 2 and the individual chose to consume 10.5 units of good 1 and 49 units of good 2. In the second situation p was

3 and the individual chose to consume 8 units of good 1 and 56 units of good 2. In a third situation p was 0.5.

Compare the maximised levels of utility in each of the three situations. Picking the situation that makes Billie best off, what is her

level of utility?

Question _6 . 4 points Save Answer Consider Billie. whose preferences are either Perfect Substitutes, Perfect Complements or CobbDouglas with parameter a. allocating a given endowment between two goods whose prices are p and 1 respectively. Billie's endowments of the two goods are 10 and 50 units respectively. In the rst situation pwas 2 and the individual chose to consume 10.5 units of good 1 and 49 units ofgood 2. In the second situation pwas 3 and the individual chose to consume 8 units of good 1 and 56 units of good 2. in a third situation 1: was 0.5. Compare the maximised levels of utility in each of the three situations. Picking the situation that makes Billie best off, what is her level of utility? O H: 18.61 0 11:36.76 0 u=31.24 o u=30.24 O u = 17.27