How would Luis rank the following bundles A 21 B 13 C 52

How would Luis rank the following bundles: A = (2,1), B = (1,3), C = (5,2), D = (4,3), E = (1,5), F = (3,3)

Solution

luis utility function

U= x^0.4y^0.6

A = (2,1)

U_A=2^0.4 1^0.6= 1.3

B = (1,3)

U_B= 1^0.43^0.6 = 1.9

C = (5,2)

U_C= 5^0.42^0.6 = 2.9

D = (4,3)

U_D= 4^0.43^0.6 = 3.4

E = (1,5)

U_E= 1^0.45^0.6 = 2.6

F = (3,3)

U_F= 3^0.43^0.6 = 3

rank of bundles in decreasing order of utility

D

F

C

E

B

A