How to define a utility function
John spends $I on bottled water which he can buy in two sizes: 0.75 liter and 2 liter. The water is identical in the two sizes and John gets no utility from the containers themselves, only from the water. How to define a utility function?
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If the price of one hot dog is $3 and the price of one soda is $2, is Dave currently maximizing his utility? If not, how should he reallocate his spending in order to increase his utility?
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Gundy Compny expects to produce 1,263,240 units of Product XX in 2012. Monthly production is expected to range from 74,420 to 119,960 units.
The water is identical in the two sizes and John gets no utility from the containers themselves, only from the water. How to define a utility function?
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Explain how, with no change in budget size for the firm and with the given factor price ratio, output of the firm can be increased.
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