Question:

Utility question: check answer/help?

by Guest44811  |  earlier

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if u(x1, x2)= 4(x1)^.5 +(x2) where x1 = units of nuts, x2 = units of berries

and Nathan originally consumed 16 units of nuts and 20 units of berries but now his consumption of berries is reduced to 12 units, how much nuts does he have to consume to keep him as happy as before?

would this be 36 nuts? i plugged in 16=x1 and 20=x2 and got 36 and used that # as the utility: then i plugged in that number as the utility and x2=12 to get x1 = 36

is this right?? if not, please tell me how to do it

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3 ANSWERS


  1. 4(16)^.5 + 20 = 36

    then hold utility constant and add the new amt of berries:

    4(x1)^.5 + 12 = 36

    4(x1)^.5 = 24

    (x1)^.5 = 6

    x1 = 36

    Yep, you did it correctly


  2. Good job  that is the way to do it

    See this econ stuff isn't so hard

  3. Bingo. Yes you're right. This is assuming that the individual's level of utility unchange. :)

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