Problem 1: Bob's utility function for soda and pizza is u(x, x)=xx where x is the...

  

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Problem 1: Bob's utility function for soda and pizza is u(x₁, x₂)=√x₁√√x₂ where x₁ is the number of cans of soda and x₂ is the number of slices of pizza that Bob consumes. a) Graph Bob's indifference curve, labeling at least three points. See back! Did this one b) If given the choice between 2 slices of pizza and 4 cans of soda or 4 slices of pizza and 2 cans of soda would Bob prefer the bundle with more pizza, the bundle with more soda, or be indifferent between the two bundles? c) Bob was consuming 2 slices of pizza and 4 cans of soda. Alice offered to give Bob 1 slice of pizza in exchange for 1 can of soda. Would Bob want to make this trade? d) Derive the formula for Bob's marginal rate of substitution between pizza and soda. Problem 1: Bob's utility function for soda and pizza is u(x₁, x₂)=√x₁√√x₂ where x₁ is the number of cans of soda and x₂ is the number of slices of pizza that Bob consumes. a) Graph Bob's indifference curve, labeling at least three points. See back! Did this one b) If given the choice between 2 slices of pizza and 4 cans of soda or 4 slices of pizza and 2 cans of soda would Bob prefer the bundle with more pizza, the bundle with more soda, or be indifferent between the two bundles? c) Bob was consuming 2 slices of pizza and 4 cans of soda. Alice offered to give Bob 1 slice of pizza in exchange for 1 can of soda. Would Bob want to make this trade? d) Derive the formula for Bob's marginal rate of substitution between pizza and soda.

Answer rating: 100% (QA)

UX X2 592 10 77 b U 42 8 U24 8 offe... View the full answer