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Question: pa 6 a parent has two children living in cities...

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PA 6. A parent has two children living in cities with different costs of living. The cost of living in city B is 3 times the cost of living in city A. The child in city A has an income of $2,000 and the child in city B has an income of $6,000. The parent wants to give a total of $2,000 to her two children. Her utility function is U(CA, CB)-CACB,where C A and C B are the consumptions of the children living in cities A and B respectively. She will choose to give 0096 each child $1,000, eventhough this will buy less goods for the child in city B. b. the child in city B 3 times as much money as the child in city A. c. the child in city B 1.50 times as much money as the child in city A d. the child in city A 3 times as much money as the child in city B. e. the child in city A 1.50 times as much money as the child in city B.
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