Question

Show that the utility functions u(x1, x2)=sqrt(x1) *sqrt(x2) and u(x1, x2) = 0.7 log(x1) + 0.3...

Show that the utility functions u(x1, x2)=sqrt(x1) *sqrt(x2) and u(x1, x2) = 0.7 log(x1) + 0.3 log(x2) represent different preferences. Hint: find two bundles such that a consumer’s prefer- ences are reversed under the above two utility functions.

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