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.

Exploring Economics
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ISBN:9781544336329
Author:Robert L. Sexton
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Chapter10: Consumer Choice Theory
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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.
=
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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