Your utility function is equal to U (x, y) = xy. Imagine that your friend currently...

 

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Your utility function is equal to U (x, y) = xy. Imagine that your friend currently has the bundle (12,5). You really like that bundle and want to achieve the level of utility you would get from it but you're stuck with 6 units of z. How many units of y should you buy so that you are indifferent to your friend's bundle? Miz would gain utility if you gave him more z. However, if you gave him more y, it won't have any effect on his utility. What property of indifference curves fails (weakly) if this is true? Your utility function is equal to U (x, y) = xy. Imagine that your friend currently has the bundle (12,5). You really like that bundle and want to achieve the level of utility you would get from it but you're stuck with 6 units of z. How many units of y should you buy so that you are indifferent to your friend's bundle? Miz would gain utility if you gave him more z. However, if you gave him more y, it won't have any effect on his utility. What property of indifference curves fails (weakly) if this is true?

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To find the bundle that makes you indifferent to your friends bundle we need to find the combination ... View the full answer