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Author Question: Amos Long's marginal utility of income function is given as: MU(I) = I1.5, where I represents ... (Read 167 times)

Pineapplelove6

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on: Jul 1, 2018
Amos Long's marginal utility of income function is given as: MU(I) = I1.5, where I represents income. From this you would say that he is
 
  A) risk averse.
  B) risk loving.
  C) risk neutral.
  D) none of the above

Question 2

Sue views hot dogs and hot dog buns as perfect complements in her consumption, and the corners of her indifference curves follow the 45-degree line.
 
  Suppose the price of hot dogs is 5 per package (8 hot dogs), the price of buns is 3 per package (8 hot dog buns), and Sue's budget is 48 per month. What is her optimal choice under this scenario? A) 8 packages of hot dogs and 6 packages of buns
  B) 8 packages of hot dogs and 8 packages of buns
  C) 6 packages of hot dogs and 6 packages of buns
  D) 6 packages of hot dogs and 8 packages of buns


ErinKing

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Reply #1 on: Jul 1, 2018
Answer to Question 1

B

Answer to Question 2

C


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