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Henry’s utility function is x^2 + 16xw + 64w^2 , where x is his consumption of x and w is his consumption of w. Set the utility function equal to a constant, say k and then try to solve one in terms of the other.

a. Henry’s preferences are nonconvex.
b. Henry’s indifference curves are straight lines.
c. Henry has a bliss point.
d. Henry’s indifference curves are hyperbolas.
e. None of the above.

Respuesta :

Answer:

Henry’s utility function is x^2 + 16xw + 64w^2 , [tex]x^{2} +16xw+ 64w^{2}[/tex] Henry’s indifference curves are hyperbolas.

Explanation:

"The standard equation for a hyperbola with a vertical transverse axis is - = 1. The center is at (h, k). The distance between the vertices is 2a. ... A hyperbola with a vertical transverse axis and center at (h, k) has one asymptote with equation y = k + (x - h) and the other with equation y = k - (x - h)."

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