Utility Function

A utility function measures a consumer's utility after consuming a combination of products.

Example

Alice loves chocolate (X) and strawberries (Y). Her utility is $$u \left( X, Y \right) = X \times Y$$

If Alice has 2 chocolates bars and 1 strawberry, she gets utility $$u \left( 2, 1 \right) = 2 \times 1 = 2$$

Question

Alice loves chocolate (X) and strawberries (Y).

Her utility function is `u (X, Y) = XY`.

What is her utility for 4 chocolate bars and 3 strawberries?

For 4 chocolate bars and 3 strawberries, Alice's utility is $$ u \left( 4, 3 \right) = 4\times3 = 12 $$