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Lisa Consumes Only Pizzas (P)and Burritos (B)

question 47

Essay

Lisa consumes only pizzas (P)and burritos (B).Her utility function is U = P0.5 B0.5.The price of per pizza is $10 and the price per burrito is $5.In equilibrium,Lisa consumes 4 pizzas.Using Lisa's utility function,calculate how many burritos she consumes.


Definitions:

Representing Problem

The process of conceptualizing and framing a problem in a way that can be understood and addressed effectively.

Working Backward

A problem-solving strategy involving starting with the desired final outcome and progressively working towards the starting point to find a solution.

Stairs

Constructed steps that allow people or animals to move from one level to another, typically within buildings or outdoor structures.

Mental Set

A psychological inclination to approach situations in a certain way, based on prior experiences and perceptions, which can impact problem-solving and behavior.

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