Imagine there are two goods, X and Y. The utility function is: U = XY. The price
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Imagine there are two goods, X and Y. The utility function is: U = XY. The price of X is $2 and the price of Y is $4. The budget is $20. What is the optimal quantity of X and Y to consume?
Imagine there are two goods: books and coffees. Your utility function is U = BC, where B is the number of books you consume and C is the number of coffees you consume. If your budget is $40, the price of books is $10, and the price of coffees is $4, how much of each good will you consume?
Please show work and explain the method behind finding utility and all steps involved.
Related Book For
Microeconomics
ISBN: 9781464146978
1st Edition
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
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