Shirley thinks a 16-ounce can of beer is just as good as two
8-ounce cans. Lorraine only drinks 8 ounces at a time and hates stale
beer, so she thinks a 16-ounce can is no better or worse than an 8-ounce
can.
(a) Write a utility function that represents Shirleyâs preferences between
commodity bundles comprised of 8-ounce cans and 16-ounce cans of beer.
Let X stand for the number of 8-ounce cans and Y stand for the number
of 16-ounce cans.
(b) Now write a utility function that represents Lorraineâs preferences.
Please explain your answer in detail for the following question:
(d) Give an example of two commodity bundles such that Shirley likes
the first bundle better than the second bundle, while Lorraine likes the
second bundle better than the first bundle.
Shirley thinks a 16-ounce can of beer is just as good as two
8-ounce cans. Lorraine only drinks 8 ounces at a time and hates stale
beer, so she thinks a 16-ounce can is no better or worse than an 8-ounce
can.
(a) Write a utility function that represents Shirleyâs preferences between
commodity bundles comprised of 8-ounce cans and 16-ounce cans of beer.
Let X stand for the number of 8-ounce cans and Y stand for the number
of 16-ounce cans.
(b) Now write a utility function that represents Lorraineâs preferences.
Please explain your answer in detail for the following question:
(d) Give an example of two commodity bundles such that Shirley likes
the first bundle better than the second bundle, while Lorraine likes the
second bundle better than the first bundle.