Suppose your utility function for food (F) and clothing (C) is u(F,C) = F + 4C. If you reduce your clothing consumption by 2 units, how much do you have to increase your food consumption in order to maintain the same utility level?
A) 2 units
B) 4 units
C) 6 units
D) 8 units

Question

Quizplus · Accepted Answer

The utility function is u(F,C) = F + 4C. Reducing clothing by 2 units decreases utility by 8 (since 4*2=8). To maintain the same utility, food consumption must increase by 8 units.

Suppose Your Utility Function for Food (F) and Clothing (C)