Logan consumes olives (x₁) and ice cream (x₂). He prefers to eat them only separately (nevertogether). In particular, his utility function is given by: u(x₁,x2)= x₁²+x₂². If his income is $10and the price of olives is $1 and the price of ice cream is $2. Which of the following isFALSE?The optimal bundle Logan will choose to consume is (2,4)None of the aboveThe utility level at a bundle (2,4) is 20The utility level when he spends all of his income on good 1 is 100The utility level when he spends all of his income on good 2 is 25

Let us investigate each assertion given the consumer's utility function u(x1,x2)=, income I =…

Logan consumes olives (x₁) and ice cream (x₂). He prefers to eat them only separately (never together). In particular, his utility function is given by: u(x₁,x2)= x₁²+x₂². If his income is $10 and the price of olives is $1 and the price of ice cream is $2. Which of the following is FALSE?

Logan consumes olives (x₁) and ice cream (x₂). He prefers to eat them only separately (never together). In particular, his utility function is given by: u(x₁,x2)= x₁²+x₂². If his income is $10 and the price of olives is $1 and the price of ice cream is $2. Which of the following is FALSE?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter7: Consumer Choice: Maximizing Utility And Behavioral Economics

Section: Chapter Questions

Problem 6QP

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Question

Logan consumes olives (x₁) and ice cream (x₂). He prefers to eat them only separately (never
together). In particular, his utility function is given by: u(x₁,x2)= x₁²+x₂². If his income is $10
and the price of olives is $1 and the price of ice cream is $2. Which of the following is
FALSE?
The optimal bundle Logan will choose to consume is (2,4)
None of the above
The utility level at a bundle (2,4) is 20
The utility level when he spends all of his income on good 1 is 100
The utility level when he spends all of his income on good 2 is 25

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