Question: Korra has a utility function UA (X 1 , X 2 ) = [X 1 + 2) x (X 2 +3] 2 She has income

Korra has a utility function UA (X1, X2) = [X1 + 2) x (X2+3]2

She has income m and faces prices P1 and P2 fo goods 1 and 2 respectively. Find her optimal consumption bundle.

a. X*1 = m+2P1 - 3P2/2P1 , X*2 = m-2P1+3P2/2p2

b. X*1 = m-3P1 + 2P2/3P1, X*2 = m+3P1-2P2/3P2

c. X*1= m-3P1 + 2P2/2P2, X*2 = m+3P1-2P2/2P1

d. X*1 = m+2P1 - 3P2/3P2, X*2 = m-2P1+3P2/3P1

e. none of thee options

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Q:

Hi tutor. Kindly help me solve these I1 Exercise 2. Let f: R" + R be a real-valued function on R", and Xo = E R a In point. (a) If f is differentiable at Xo, explain what it means to say that the...

Q:

Need help with budget constraints, optimal bundles in the below exps of microeconomics. already calculated 1st two but want to understand rest. The questionsv are ordered a,b,c,d,e,f.Thnx Jamal has...

Q:

Jamal has utility functionU B (X 1 ,X 2 )=(X 1 +2)(X 2 +3) . He also has incomem , and faces pricesP 1 andP 2 for goods 1 and 2 respectively. What is Jamal's budget constraint? P 1 X 1 +P 2 X 2 =m (P...

Q:

3. A person has the Utility function u: X1 X2 and an endowment m=100. The person faces prices of P1=5 and P2=1 0 for two goods. a) Sketch this person's budget constraint and show the utility...

Q:

Jamal has a utility function Ub (X 1, X 2 ) = (X 1 + 2) x (X 2 +3). He also has income m , and faces P 1 and P 2 for goods 1 and 2 respectively. What is Jamal's budget constraint? a. P 1 X 1 + P 2 X...

Q:

5. [4 | 5 | 5 | 8 = 22 points] Liz's utility function over goods 1 and 2 is given by: u(x1,mg) : v/ml + Bum (i) You already derived Liz's M'arshalz'an demands for goods 1 and 2 in Q3(i). Show that...

Q:

Avery has preferences over gum (1) and lollipops (2) with her utility function given by (1, 2 ) = 1 22 . Initially, the prices of gum (p1) is $2 and the price of lollipops (p2) is $1. Avery has an...

Q:

3. Suppose Amy and Bailey are consumers in a pure exchange economy, with two goods, tonkas and zeenas (this will be used as the numeraire and will be normalized to 1). Amy has 9 units of tonkas and...

Q:

Assume p1 = p2 = 1 and the consumer has an income m = 10. Suppose that the consumer's utility function is u(x 1 , x 2 ) = x 1 x 2 . Find the consumer's budget constraint. Find the consumer's optimal...

Q:

Answer all 4 questions well.thanks Example 8.4.1. A certain life office's premium basis for lives accepted at normal rates is as follows: Mortality: A1967-70 ultimate Interest: 4% per annum Expenses:...

Q:

Which do you think has a greater effect on the consumer price index: a 10 percent increase in the price of chicken or a 10 percent increase in the price of caviar? Why?

Q:

Give a specific example of a company that uses the geocentric orientation. Explain why you think it fits a geocentric orientation. How many countries does it operate in? Do not use examples (IBM,...

Q:

A programmable timer / counter chip contains an 8 - bit "divisor" register. a ) If the CLOCK frequency is 1 . 0 M H z , what is the minimum output frequency? ( 2 Marks ) b ) If the CLOCK frequency is...

Q:

JoyManiposa.Com Sdn Bhd (JMC) is a Fintech company providing financial solutions to banks and financial institutions in Malaysia. The company has been established for five years and the auditor has...

Q:

3. Tactical/strategic information.

Q:

3. To retrieve information from memory.

Q:

2. Value-oriented information and