Shirley thinks a 16-ounce can of beer is as good as two 8 ounce cans.Lorraine only drinks
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Question:
Shirley thinks a 16-ounce can of beer is as good as two
8 ounce cans. Lorraine only drinks 8 ounces at a time and hates stale
beer, so you think a 16-ounce can is no better or worse than an 8-ounce can.
can.
(a) Write a utility function that represents Shirley's preferences between
commodity packages consisting of 8-ounce cans and 16-ounce beer cans.
Let X be the number of 8-ounce cans and Y be the number
of 16 ounce cans.
(b) Now write a utility function that represents Lorraine's preferences.
Please explain in detail your answer to the following question:
(d) Give an example of two packages of basic products that Shirley likes
the first package better than the second package, while Lorraine likes the
second package better than the first.
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