Question

Chad's utility function is U(xp,xc)=xpxc, where xp is protein shakes in gallons and xc is chicken breasts in pounds. Chad's indifference curve passes through the point (xp,xc)=(10,30). If Chad drinks 2 gallons of protein shake, how many pounds of chicken breasts does Chad need to consume to stay on the same indifference curve?

Group of answer choices

300

50

150

25

neither one is correct

Answer 1

The utility function is given as:

U = x_{​​​​​​p}​​​​​x_​​_{​​​​c}

The indifference curve shows all possible bundles of two goods which give same level of utility to the individual. It is given that the indifference curve passes through the point (10,30). This means that the consumer is consuming 10 gallons of protein shake and 30 pounds of chicken breast. So, the total utility of the consumer is (10)(30) which equals 300.

If the consumer is consuming two gallons of protein shakes then in order to remain at the same indifference curve, the consumer must consume 300/2 = 150 pounds of chicken breasts.

Therefore, the correct answer is 'Option C'.