Question: [25 points] Nick has a utility function U (x, y) = x2322 and faces the budget constraint pix + pyy = Y . . Suppose

[25 points] Nick has a utility function U (x, y) = x2322 and faces the budget constraint pix + pyy = Y . . Suppose that Y=120, py =1 and p1 =4. What are Nick's utility maximizing amounts of good x and good y? What level of utility is Nick able to attain? . If the price of x is lowered to px = 2 , what are Nick's utility maximizing amounts of good at and good y? What level of utility is Nick able to attain? . What is the most Nick is willing to pay to have P; reduced from 4 to 2'? . Suppose that Y = 120 , py =1 and p1 = 4 . How much additional income does Nick need to receive in order to be as well off as when px = 2

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