Asked by
Brittney McDaid
on Dec 01, 2024
Verified
Russ Tickman is a dairy farmer.He consumes milk and other goods.His utility function is given by U(x, y) = y(x + 1) , where x is his milk consumption and y is his consumption of other goods.His initial endowment is 19 units of milk per day and no units of other goods.If the price of milk is $2 and the price of other goods is $1, how much milk does he consume?
A) 9 gallons
B) 38 gallons
C) 20 gallons
D) 14 gallons
E) 12 gallons
Utility Function
A mathematical representation of how choices lead to different levels of happiness or satisfaction, showcasing preferences over a set of goods or outcomes.
Milk Consumption
The amount of milk drunk or used by individuals or populations over a specific period.
Endowment
The total resources available to an individual or economy, including land, labor, capital, and technology.
- Analyze the effect of price changes on consumption habits for different goods.
Verified Answer
JV
Learning Objectives
- Analyze the effect of price changes on consumption habits for different goods.