Question: Consider the following utility maximization problem: m a x x , y U = x . 7 5 y 2 5 such that 3 x
Consider the following utility maximization problem:
such that
A Use the cells below to set up this maximization problem
Do not start both quantities at The Solver throws an error given the functional form.
It would be helpful to name your ranges as follows:
B Use Solver to determine the quantity of each good within the optimal bundle.
Produce the Sensitivity Report. Call this new report LM
C From LM we can determine the marginal utility of income. If our income increases by $ our utility will increase by
Be sure to use cell reference to your LM sheet here!
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