1. Suppose a consumer's utility function is: U (x₁, x2) = x²x3. Furthermore, suppose the con- sumer's disposable income is $80, and the prices of the two goods are: x₁ = 4 and x2 = 2. Obtain the optimal amounts of ₁ and ₂ that the utility maximizing consumer would buy.
1. Suppose a consumer's utility function is: U (x₁, x2) = x²x3. Furthermore, suppose the con- sumer's disposable income is $80, and the prices of the two goods are: x₁ = 4 and x2 = 2. Obtain the optimal amounts of ₁ and ₂ that the utility maximizing consumer would buy.
Chapter10: Consumer Choice Theory
Section: Chapter Questions
Problem 6P
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![1. Suppose a consumer's utility function is: U (x1, x₂) xx. Furthermore, suppose the con-
sumer's disposable income is $80, and the prices of the two goods are: x₁ = 4 and 2 2.
Obtain the optimal amounts of î₁ and î that the utility maximizing consumer would buy.
=](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6caf6888-7510-4e57-98ad-4d3884a1ba86%2Fd9151927-800d-4aff-9657-bc305f247888%2Fe1crd5m_processed.png&w=3840&q=75)
Transcribed Image Text:1. Suppose a consumer's utility function is: U (x1, x₂) xx. Furthermore, suppose the con-
sumer's disposable income is $80, and the prices of the two goods are: x₁ = 4 and 2 2.
Obtain the optimal amounts of î₁ and î that the utility maximizing consumer would buy.
=
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