Author Question: Jane's utility function is represented as: U = F0.5 C0.5, F is quantity of food and C is quantity of ... (Read 109 times)

silviawilliams41 · **on:** Jul 1, 2018

Jane's utility function is represented as: U = F0.5 C0.5, F is quantity of food and C is quantity of clothing. If her budget constraint is represented as: 120 = 2F + C, her optimal bundle of consumption should be

A) (40F, 40C).
B) (20F, 60C).
C) (50F, 50C).
D) (45F, 20C).

Question 2

A deferred payment scheme is more likely to be accepted by a worker if

A) the firm has a reputation of not firing senior employees to save pension costs.
B) the worker is very young.
C) the worker is very old.
D) None of the above.