Examlex

Solved

Mark's Utility Function Over Dance Show Tickets (D) and Baseball

question 118

Essay

Mark's utility function over dance show tickets (D) and baseball game tickets (B) can be expressed as U(D,B) = D + 5B.
a. Use calculus to argue whether Mark's preferences also can be represented by U(D,B) = 5DB.
b. If Mark's utility function is U(D,B) = D + 5B , is the Lagrangian approach an appropriate way to solve for his optimal quantities?
c. If Mark's utility function is U(D,B) = 5DB, is the Lagrangian approach an appropriate way to solve for his optimal quantities?


Definitions:

Commission Rate

The percentage or fixed payment associated with a transaction or sale that is given to the intermediary or salesperson.

Commission Rate

The percentage of a sale price that is paid to the salesperson as a reward for making the sale or dealing.

Freight

Goods transported in bulk by truck, train, ship, or airplane.

Net Proceeds

The amount of money received from a transaction after all costs and expenses have been paid.

Related Questions