Gabriel the consumer, has preferences over goods x and y that are perfect substitutes, where utility is u(x,y) = x + y. He has an income of $152. The price of y is $12. If the price of x falls from $8 to $2, then Gabriel's, optimal choice for good x should rise by units. O 51 O 53 O 55 O 57

Gabriel the consumer, has preferences over goods x and y that are perfect substitutes, where utility is u(x,y) = x + y. He has an income of $152. The price of y is $12. If the price of x falls from $8 to $2, then Gabriel's, optimal choice for good x should rise by units. O 51 O 53 O 55 O 57

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 2.5P

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Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

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