Question

Quasimodo consumes earplugs and other things. His utility function for earplugs x and money to spend on other goods y is given by

ux,y=100x-x22+y
What kind of utility function does Quasimodo have?

Answer 1

Quasimodo's utility function is given by u(x,y)=100x-x^2+ y. This utility function represents Quasimodo's preference for consuming earplugs (x) and other goods (y).

Step-by-step explanation:

Quasimodo's utility function is given by u(x,y)=100x-x^2+ y. This utility function represents Quasimodo's preference for consuming earplugs (x) and other goods (y). The utility function is quadratic in x, which means that as Quasimodo consumes more earplugs, his satisfaction initially increases but eventually decreases. The utility function is linear in y, indicating that Quasimodo's satisfaction from consuming other goods depends solely on the quantity consumed.