Suppose That Morris Has the Utility Function U(b, W)= 5b

question 4

Multiple Choice

suppose that Morris has the utility function U(b, w) = 5b + 15w and Philip has the utility function U(b, w) = bw.If we draw an Edgeworth box with books on the horizontal axis and wine on the vertical axis and if we measure Morris's consumptions from the lower left corner of the box, then the contract curve contains

• A)a straight line with slope 1/3 passing through the lower left corner of the box.
• B)a straight line with slope 1/3 passing through the upper right corner of the box.
• C)a straight line running from the upper right corner of the box to the lower left.
• D)a curve that gets steeper as you move from left to right.
• E)a curve that gets flatter as you move from left to right.

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Definitions:

Hill-climbing

A mathematical optimization technique that involves iterative progress toward a solution or goal by incrementally improving from the current state.

Heuristics

Mental shortcuts or rules of thumb that simplify decision-making processes, often leading to quicker but sometimes less accurate judgments.

Vocabulary

The set of words known and used by a person in a language.

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used, hindering problem-solving and creativity.