Two consumers Jim and Pam both have opera tickets and movie tickets.They wish to exchange tickets with each other.Jim's utility function can be expressed as And Pam's as
If you take maximizing Pam's utility as the objective function there are how many constraints to be accounted for?
A)1
B)2
C)3

Question

Two consumers Jim and Pam both have opera tickets and movie tickets.They wish to exchange tickets with each other.Jim's utility function can be expressed as And Pam's as 
If you take maximizing Pam's utility as the objective function there are how many constraints to be accounted for?
A)1 
B)2 
C)3

Quizplus · Accepted Answer

In order to maximize Pam's utility function, we need to take into account the constraints of both Jim and Pam. There are three constraints:
1) Jim must be willing to give up his opera ticket
2) Pam must be willing to give up her movie ticket
3) The exchange must be mutually beneficial, meaning that both Jim and Pam end up better off than they were before the exchange.

Two Consumers Jim and Pam Both Have Opera Tickets and Movie