QUESTION 1 Researchers have found that the preferences over cafeteria food take

Question

QUESTION 1 Researchers have found that the preferences over cafeteria food take the following form u 100 PC 102 FC-99 PZ-36 Costs PC- number of pork chops FC number of fried chicken pileces PZ number of pizza slices Costs cost in dolars of lunch How mary dolire s the consumer wiling to py tor an esta pork chop? ehint make pork chops x1 and enter the numplive DO NOT INPUT A QUESTION 2 The utility function and the prices are the following: U min( 83 x1,20 x2) P1-13, P2 85 and I 4,335 What is the amount of maximized utility? QUESTION 3 Click Save and Submit to save and submit. Click Save All Answers to sawe all answers.

Explanation / Answer

1 )

Consumer wiliness to pay for an extra pork chop is:

= 100/36

=2.77

2)

U =Min(83x1, 20x2)

83x1 = 20x2

X1 = (20/83)*X2

Px *X1 + P2*X2 = I

13*(20/83)*X2 + 85*X2 = 4335

88.13X2 = 4335

X2 = 4335 / 88.13

= 49.18

Substituting value of X2

13*X1 + 85*49.18 = 4335

X1 = 12.13

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