Preferences are represented by utility function

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Reference no: EM131392075

Suppose that two consumers A and B buy two goods, food (F) and clothing (C). Consumer A’s preferences are represented by the utility function U(F,C) = 5*F*C, while consumer B’s utility function is U(F,C) = 0.05*F2*C2.

Using a graph with F on the horizontal axis and C on the vertical axis, show the set of points that give consumer A the same level of utility as the bundle (F,C) = (10,10). Do the same for consumer B on a separate graph.

On the same graphs, identify the bundles that give consumers A and B the same level of utility as the bundle (F,C)=(15,12).

Do the consumers A and B have the same preferences ? Explain.

Can you provide a detailed answer showing the working please. I have an exam that is going to require me being able to do a question like this.

Reference no: EM131392075

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