Question

Rudi in consuming beef burgers (X) and soft drinks (Y) has a total satisfaction function as...

Rudi in consuming beef burgers (X) and soft drinks (Y) has a total satisfaction function as follows: TU = √ (XY). If it is known that the prices of each commodity X and Y are $ 10.00 and $ 40.00 where the money Rudi has is $ 200.00,

then Question:

a. What is the form of Rudi's indifference curve (IC) equation for TU = 10!

b. Determine the point of optimal consumption / Rudi's balance! And how many TU at that time?

c. If it is known that the price of commodity X has increased to $ 20.00 (ceteris paribus), then answer the question b. above!

d. If Rudi's request for X is linear, then what will the function be like, explain!

e. If there are 10 identical consumers in the market with Rudi, then what is the form of the demand function?

f. Draw questions d and e above into the graph!

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