La Yin LIkes brownies (B) and Chocolate bars (C) and is on the indifference curve: U(B,C) = B^2. Consider the?

Question

La Yin LIkes brownies (B) and Chocolate bars (C) and is on the indifference curve: U(B,C) = B^2. Consider the following bundles for La Yin

(this is the table)

....................B,C

Bundle A....5,10

Bundle B....3, 4

Bundle C....2 , 9

Bundle D....5, 5

a. Which bundle is most preferred by La Yin?

B. which is the least prefferred?

c. which bundle is she indifferent to?

D. Suppose La Yin initially had Bundle A, but chocolate bars were removed! How many brownies would she require to be as well off as she was before?

Answer 1

The utility function in this question only considers Brownies, so when she chooses her bundle she only looks at how many brownies she can get.

a) Bundle A and D, both are equally preferred because they have the same amount of Brownies. since Chocolate is not in the Utility function, it doesn't matter which bundle has more chocolate

b) Bundle C, it has the fewest Brownies

c) Bundle A and D, both have same amount of Brownies, the only variable in her utility function, so they lie on the same indifference curve

d) 0. Chocolate is not important to La Yin, so it doesn't matter if they are removed.

for problems like this, it is often useful to draw a graph to help visualize what exactly is going on