Suppose Bob's utility function over wine and books is U= W.*B0.0 He sets aside $1000 of...

 

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Suppose Bob's utility function over wine and books is U= W°.*B0.0 He sets aside $1000 of his income per month to spend on his two hobbies, collecting wine and collecting books. The price of a book is $6. The initial price of wine is $40 per bottle. 1. Solve for Bob's optimal bundle. Bob's optimal bundle consists of bottles of wine and books. 2. Let P denote the price of wine. Derive an Bob's demand function for wine. Bob's demand function for wine is W = (Enter a function in terms of P). Suppose Bob's utility function over wine and books is U= W°.*B0.0 He sets aside $1000 of his income per month to spend on his two hobbies, collecting wine and collecting books. The price of a book is $6. The initial price of wine is $40 per bottle. 1. Solve for Bob's optimal bundle. Bob's optimal bundle consists of bottles of wine and books. 2. Let P denote the price of wine. Derive an Bob's demand function for wine. Bob's demand function for wine is W = (Enter a function in terms of P).

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wHhity funchion ouen uune and book is U Woy Income per month 1000 To Spend on his fun habb... View the full answer