3 Suppose the utility function is given by U(x₁,x₂) = (x²). Calculate the optimal con- sumption bundle if Ann's income equals 10 and both goods have a price of 1. (Hint: Use a monotone transformation first..)

3 Suppose the utility function is given by U(x₁,x₂) = (x²). Calculate the optimal con- sumption bundle if Ann's income equals 10 and both goods have a price of 1. (Hint: Use a monotone transformation first..)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 6P

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Suppose the utility function is given by U(2₁,22) = (2²2). Calculate the optimal con-
sumption bundle if Ann's income equals 10 and both goods have a price of 1. (Hint: Use a monotone
transformation first.)

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