Kirk buys a Whaler sandwich for $4 when fish tacos are priced above $8, but choo
ID: 1189428 • Letter: K
Question
Kirk buys a Whaler sandwich for $4 when fish tacos are priced above $8, but chooses the tacos when they are on sale for $7, but even if the fish tacos go on sale for $7, he chooses the burger at Burger King when they have their half price special. Which preferences best describe Kirk's behavior and why?= 2W+FT =min[2W,FT] = W(FT^2) = W+2FT Kirk buys a Whaler sandwich for $4 when fish tacos are priced above $8, but chooses the tacos when they are on sale for $7, but even if the fish tacos go on sale for $7, he chooses the burger at Burger King when they have their half price special. Which preferences best describe Kirk's behavior and why?
= 2W+FT =min[2W,FT] = W(FT^2) = W+2FT
= 2W+FT =min[2W,FT] = W(FT^2) = W+2FT
Explanation / Answer
When price of Fish taco (FT) is $8, Kirk buys FT.
When price of FT < $8, he buys Whaler Sandwich (W) at price of $4.
With $8, he can buy 2W or 1 FT.
Therefore, for Kirk, W & FT are perfect substitutes (he does not buy both the food items together). Therefore, his Utility function is
U = 2W + FT
When FT = 0, he buys only Whaler Sandwich (2 in quantity). But when W = 0, he buys only Fish Taco.
Correct option (1)
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