Re: Daily question

Posted by Amit Goyal on Mar 16, 2009; 1:15am
URL: http://discussion-forum.276.s1.nabble.com/Daily-question-tp2328964p2483660.html

16 March 2009
Consider Ms. Bijlee whose utility function is min {E, W}, where E is her electricity consumption and W is her consumption of widgets. Suppose Ms. Bijlee’s income is 10 and the prices of widgets and electricity are 1. In order to curb Ms. Bijlee’s electricity consumption, the electricity company decides to impose a surcharge of Re. 1 on every unit of electricity consumed in excess of 4 units. What is the resulting reduction in Ms. Bijlee’s  electricity consumption?
Ref: DSE Exam 2004