Question: Consider individuals that have a utility function U = X Y7for X, trips to the gym per fortnight and Y, dollars of spending on all

Consider individuals that have a utility function U = X Y7for X, trips to the gym per fortnight and Y, dollars of spending on all other goods.Assume the individuals' income per fortnight is M and theprice per gym trip is of PX.

Question:

If Jenny was instead given a lumpsum subsidy equivalent to the cost of the $2 per trip subsidy so long as she was gym member, how many trips to the gym would Jenny make? Use Jenny'sutility function to explain which scheme Jenny prefers.Note you will get very large numbers for utility even after dividing by a billion.

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