Question

Stacy likes to eat pancakes for breakfast. Her utility (happiness) function is u(x) = x 1/3 , where x is the number of pancakes consumed per week. Suppose Stacy currently consumes 8 pancakes each week. Stacy’s doctor orders her to cut down her pancake consumption by 2 per week. Approximately how much has her happiness changed since she started cutting back on her pancake consumption for a week?

Answer 1

1.26

u(8) - u(2) = 0.74

Explanation:

Given

u(x) = ∛x

where x is the number of pancakes consumed per week

and

u(x) is her utility (happiness)

If x = 8

u(8) = ∛8 = 2

Now, if x = 2

u(2) = ∛2 = 1.26

then

u(8) - u(2) = 2 - 1.26 = 0.74