Fisher's utility function for trout (T) and salmon (S) is given by U = ST, where the MU_T = S and MU_S = T. Which set of consumption bundles lies on the same indifference curve? A) bundles of (S = 2 and T = 4) and (S = 3 and T = 3) B) bundles of (S = 5 and T = 5) and (S = 25 and T = 1) C) bundles of (S = 10 and T = 2) and (S = 5 and T = 1) D) bundles of (S = 8 and T = 6) and (S = 7 and T = 10)

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Quizplus · Accepted Answer

The utility for both bundles in option B is 25 (5*5 and 25*1), indicating they lie on the same indifference curve.

Fisher's Utility Function for Trout (T) and Salmon (S) Is