2) A consumer’s utility function is: U(x,y) = sqrt(9xy). The price of each good is: (PX,PY) = (15,20). The monthly budget is: M = 600, answer the following: a. What is the optimal bundle (X, Y) that maximizes the consumer’s utility? b. What is the optimal utility given your answer from part a? c. If the desired level of utility the consumer is U = 400, what would be the optimal bundle (X, Y) to minimize consumer expenses?
2) A consumer’s utility function is: U(x,y) = sqrt(9xy). The price of each good is: (PX,PY) = (15,20). The
monthly budget is: M = 600, answer the following:
a. What is the optimal bundle (X, Y) that maximizes the consumer’s utility?
b. What is the optimal utility given your answer from part a?
c. If the desired level of utility the consumer is U = 400, what would be the optimal bundle (X, Y)
to minimize consumer expenses?
d. Given U = 400 from part c, what would be the new optimal bundle for both goods if PX increases
to 25?
e. Given the price increase in good X from part d, what would be the optimal bundle for this
consumer wishing to maximize its utility with an income, M = 600?
f.: Graph the budget line and utility curve from part a.
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