Britney is very fashionable when she buys a new dress d she


Britney is very fashionable. When she buys a new dress (D), she also needs to buy a hat (H) to match that dress and vice-versa. So, she views the two goods as perfect complements. The price of a dress is $10, the price of a hat is $6, and she has $64 to spend.

a) Write down a utility function that represents Britney's preferences over dresses and hats.

b) How many dresses and hats is she going to consume? (Hint: the first order conditions will not help; draw the budget constraint and the indifference curves and look at the highest one that intersects the budget constraint)

c) What is the exact value of Britney's indirect utility?

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Econometrics: Britney is very fashionable when she buys a new dress d she
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