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Question: carries utility function is u 3x y where...

Question details

Carrie’s utility function is U = 3x + y, where x is cocoa and y is tea.

(a) Are cocoa and tea substitutes or complements for Carrie? How many mugs of cocoa are equivalent to a mug of tea in terms of her utility level?

(b) If the price of cocoa is $8, the price of tea is $3 and her income is $24, how many units of cocoa and tea will she consume?

(c) What is another utility function that would also represent Carrie’s preferences?

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