Lyuba has preferences over peonies (p) and tulips (t). The following list shows all feasible bundles...

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Economics

Lyuba has preferences over peonies (p) and tulips (t). Thefollowing list shows all feasible bundles that Lyuba can consume ina month:
A = (pA,tA) = (1,3), B = (pB,tB) = (3,1), C = (pB,tB) =(2,2).
If Lyubas preferences are given by: A is indifferent to B, C isstrictly preferred to A
and C is strictly preferred to B, then:
(a) A function that represents Lyubaâ€™s preferences isU(p,t)=3p+t.
(b) A function that represents Lyubaâ€™s preferences isU(p,t)=p+t.
(c) There exists a utility function different from the onesmentioned above that rep- resents Lyubaâ€™s preferences.
(d) None of the above.

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3.9 Ratings (565 Votes)

Given Lyubas preferences over peoniesp and tulipst with feasible bundles over a month The preferences are listed as A pt tA 13 B pB tB 31 C pC tC 22 Given Lyubass preferences are ordered as She is indifferent between A and B so utility from A is equal to utility from B uA uB See Answer

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