Sally the greekrsquos preferences can be described by the, Ask an Expert

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Sally the Greek’s preferences can be described by the utility function U(x, y) = (2x1/2 + y1/2)2.

(a) What is equation for the indifference curve for a utility of 25? (2)

(b) By how much does utility increase when Freddy increases consumption of good y by one (small) unit, when initially U = 25 and x = 4? (2)

(c) Holding utility constant at 25, if initially x = 4, how many additional (small) units of y does Freddy have to consume if his consumption of x drops by 6 (small) units? (2)

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92000156

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