Consider a consumer who consumes pizzas and soft drinks. The utility function is given by U (p, s) = pa. 8B, where p represents the quantity of pizzas consumed and S represents the quantity of soft drinks consumed, and a and B are positive constants representing the consumer's preferences for each good. Assume α = 2 and ẞ = 1. If the prices of pizzas and soft drinks are $10 and $2 respectively, and the consumer has $50 to spend, which of the following statements is wrong? The slope of the budget constraint indicates that for every extra soda drink the consumer buys, they must give up 5 pizzas. The slope of the budget constraint indicates that for every extra pizza that the

Consider a consumer who consumes pizzas and soft drinks. The utility function is given by U (p, s) = pa. 8B, where p represents the quantity of pizzas consumed and S represents the quantity of soft drinks consumed, and a and B are positive constants representing the consumer's preferences for each good. Assume α = 2 and ẞ = 1. If the prices of pizzas and soft drinks are $10 and $2 respectively, and the consumer has $50 to spend, which of the following statements is wrong? The slope of the budget constraint indicates that for every extra soda drink the consumer buys, they must give up 5 pizzas. The slope of the budget constraint indicates that for every extra pizza that the

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 19SQ

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