Suppose Your Tastes Can Be Represented by the Utility Function $u \left( x _ { 1 } , x _ { 2 } \right) = x _ { 1 } ^ { 2 } + x _ { 2 } ^ { 2 }$

question 9

Essay

Suppose your tastes can be represented by the utility function $u \left( x _ { 1 } , x _ { 2 } \right) = x _ { 1 } ^ { 2 } + x _ { 2 } ^ { 2 }$ .Your demand for $x _ { 1 }$ is a. $\frac { I } { 2 p _ { 1 } }$ .

d. $\frac { I } { p _ { 1 } }$ if $p _ { 1 } < p _ { 2 }$ and 0 if $p _ { 2 } < p _ { 1 }$ .

b. $\frac { p _ { 1 } I } { p _ { 1 } ^ { 2 } + p _ { 2 } ^ { 2 } }$ .

e. None of the above

c. $\frac { I } { p _ { 1 } + p _ { 2 } }$ .

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Definitions:

Intensity

Intensity describes the degree of strength, power, or force of an action, emotion, or in a physical sense, often indicating the magnitude or seriousness of a phenomenon.

Collectivism

A cultural value that prioritizes group goals over individual goals and emphasizes the importance of cohesion within social groups.

Individualism

A social theory favoring freedom of action for individuals over collective or state control, emphasizing personal independence and the importance of individual self-reliance.

Ethically Sensitive

Pertaining to individuals or practices that are acutely aware of and responsive to ethical standards and implications.