Please give a detail answaer: Jim’s utility function is U(x, y) = xy. Jerry’s ut
ID: 1156413 • Letter: P
Question
Please give a detail answaer: Jim’s utility function is U(x, y) = xy. Jerry’s utility function is U(x, y) = 1000xy + 2000. Tammy’s utility function is U(x, y) = xy(1?xy). Oral’s utility function is U(x, y) = ?1/(10 +xy). Billy’s utility function is U(x, y) = x/y. Pat’s utility function is U(x, y) = xy. a. No two of these people have the same preferences. b. They all have the same preferences except for Billy. c. Jim, Jerry, and Pat all have the same indifference curves, but Jerry and Oral are the only ones with the same preferences as Jim. d. Jim, Tammy, and Oral all have the same preferences. 1 e. None of the above.
Explanation / Answer
Answer:
Correct option: (a) No two of these people have the same preferences
Reason: The utility function of each individual is different.
If we take a consumption bundle (10,5)
Then utility of each individual will come out to be different
Jim: 50
Jerry: 52000
Tammy: 2450
Oral: -0.016
Billy: 2
Pat: -50