Each day a precocious pre-schooler eats lunch at school using the $1 lunch allowance given by his parents.He only likes Twinkies (T)and orange slices (S),which provide him utility according to the utility function .
a)Derive the demand functions for S and T.Let represent income, the price of T winkies,and the price of slices.
b)If Twinkies cost $0.10 each and slices are $0.25 each,how should the pre-schooler spend the $1 his parents give him in order to maximize his utility? Assume fractional units are possible.What is his maximum utility level?
c)How would the price of Twinkies affect the demand for Slices?

Question

Each day a precocious pre-schooler eats lunch at school using the $1 lunch allowance given by his parents.He only likes Twinkies (T)and orange slices (S),which provide him utility according to the utility function  .
a)Derive the demand functions for S and T.Let  represent income,  the price of T winkies,and   the price of slices.
b)If Twinkies cost $0.10 each and slices are $0.25 each,how should the pre-schooler spend the $1 his parents give him in order to maximize his utility? Assume fractional units are possible.What is his maximum utility level?
c)How would the price of Twinkies affect the demand for Slices?

Quizplus · Accepted Answer

The Answer of Each day a precocious pre-schooler eats lunch at school using the $1 lunch allowance given by his parents.He only likes Twinkies (T)and orange slices (S),which provide him utility according to the utility function  .
a)Derive the demand functions for S and T.Let  represent income,  the price of T winkies,and   the price of slices.
b)If Twinkies cost $0.10 each and slices are $0.25 each,how should the pre-schooler spend the $1 his parents give him in order to maximize his utility? Assume fractional units are possible.What is his maximum utility level?
c)How would the price of Twinkies affect the demand for Slices?

Each Day a Precocious Pre-Schooler Eats Lunch at School Using