Question: A consumer with utility functionu(x, y)=x2 5y1 2has an income of$26 and the price of goodxis$3 and the price of goodyis$2.50. Assume that he has

  1. A consumer with utility functionu(x, y)=x2 5y1 2has an income of$26 and the price of goodxis$3 and the price of goodyis$2.50. Assume that he has to consume all of his income.
  2. (a) Write down the utility maximization problem subject to his budget constraint. (b) Write down the First order conditions for the maximization problem.
  3. (c) Determine the solution to this maximization problem.

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