The basic form of the Cobb-Douglas Utility function is as follows: U (x,y) = A x α y β. Where: U is the utility from consuming x units of the first product and y units of the seocnd product. A is a
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Utility functions are expressed as a function of the quantities of a bundle of goods or services. It is often denoted as U(X1, X2, X3, Xn). A utility function that describes a preference for one bundle of goods (Xa) vs another bundle of goods (Xb) is expressed as U(Xa, Xb). Where there are perfect complements, the utilit See more
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Since any monotonic transformation of this utility function will describe the same preferences, we can express the utility function as u (x 1, x 2) = min {2x 1, x 2) by multiplying x 1 and x 2 by 2 to
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