Question 11

# Nawab has two sons Saif and Amir who have export businesses. Nawab’s satisfaction/ utility level is given by adding twice of the satisfaction level of Saif with the satisfaction level of Amir. If Saif makes a profit of ₹ 100, his satisfaction level goes up by 10% and if he suffers a loss of ₹100, his satisfaction level goes down by 10%. If Amir makes profit of ₹ 100, his satisfaction level goes up by 5% and if he suffers a loss of ₹ 100, his satisfaction level goes down by 15%. Currently, Nawab’s satisfaction level is 24 and the satisfaction level of Saif is the same as the satisfaction level of Amir. If Saif makes a profit of 100 and Amir suffers a loss of ₹ 100, what is the approximate percentage change in Nawab’s satisfaction level?

Solution

Nawab’s satisfaction/ utility level is given by adding twice of the satisfaction level of Saif with the satisfaction level of Amir.

Saif makes a profit of ₹ 100, his satisfaction level goes up by 10% and if he suffers a loss of ₹100, his satisfaction level goes down by 10%.

Amir makes profit of ₹ 100, his satisfaction level goes up by 5% and if he suffers a loss of ₹ 100, his satisfaction level goes down by 15%.

Nawab’s satisfaction level is 24 and the satisfaction level of Saif is the same as the satisfaction level of Amir

Let x be the satisfaction level of Saif

24=3x

x=8

If Saif makes a profit of 100 and Amir suffers a loss of ₹ 100, the satisfaction level of Saif and Amir goes up by 10% and goes down by 15% respectively.

The satisfaction of Saif and Amir = 8.8 and 6.8

Nawab's new satisfaction/ utility level = 2*8.8+6.8 =24.4

Percentage change = $$\ \frac{\ 24.4-24}{24}$$

=1.67%

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