1. A consumer consumes two kinds of goods, namely X and Y. The total satisfaction (TU) obtained in consuming both kinds of goods is shown in the equation;

 (Unit of money in thousands of dollars).
TU = 10X + 24Y - 0.5X2 - 0.5Y2
TU is the total satisfaction in consuming goods X and Y
X is the number of items X consumed
Y is the number of items Y consumed
The price of item X is known to be $ 2, the price of item Y is $ 6 and the budget available to buy item X and item Y is $ 44.
Question:
a. Determine how many goods X and the number of goods Y must be consumed so that the consumer gets maximum total satisfaction. Determine the total satisfaction that can be obtained from consuming item X and item Y.
b. If the price of item X drops from $ 2 to $ 1, determine the quantity of item X and the number of items Y must consume to obtain maximum total satisfaction. Determine the total satisfaction that can be obtained from the consumption of item X and item Y.

Please explain it thoroughly, because I didn't understand it yet. thank you so much in advance! <3

Answer rating: 100% (QA)

Given that TV 10x 24X05x205x and or Price of x items price of y items 6Y 2x Budject 2X6X 44 given 2 ... View the full answer