Question: Exercise 1 In economic problems, consumers must make a purchase decision within a budget constraint. Suppose a consumer buys some quantities of two goods and
Exercise 1 In economic problems, consumers must make a purchase decision within a budget constraint. Suppose a consumer buys some quantities of two goods and y, with prices p, and Py; and has wealth w to spend. The consumer's total expenditure is rp: + ypy. Write a function in budget (x, y, p.x, P-y, w) that returns a boolean indicator of whether the consumer's expenditure is less than or equal to w. No error messages are necessary. Exercise 2 Now write a function that calculates the consumer's optimal bundle of goods, that is, the amounts * and y' that are within budget and maximize utility u(x,y) = xyl-a. Using calculus, you can show that the following choices maximize the consumer's utility: 1-a -- and v P Write a function that returns a list with x* and y called calc bundle (p.x, p-y, w, alpha). w
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