Please show work and steps Melissa\'s utility function is U = mm (L, E/2, 2T) wh
ID: 1176998 • Letter: P
Question
Please show work and steps
Melissa's utility function is U = mm (L, E/2, 2T) where L are lattes, E are eggs, and T is toast. She is on a diet and her calorie constraint for breakfast is Cbar = 600 calories. Suppose lattes have 300 calories, eggs have 100 calories, and toast also has 100 calories per serving. What type of utility function is this? Are these good complements, substitutes, or perfect substitutes? If she has to eat only whole servings, what will she have for breakfast, and how many calories will she consume? If she can eat partial servings, how would your answer differ?Explanation / Answer
a)As the calorie constraint for the breakfast is 600 cal this can be achieved by having utility function as U=L+E+2T....This diet is a good complement.
b) if she has to eat only whole servings...the utlility would be same as the above case U=L+E+2T as the calorie constraint for her breakfast is 600cal.....there is no much difference in the breakfast she will have to take whether it is whole servings or partial servings