3*. Ms Smith likes to drink wine; in particular, a french bordeaux (ƒ) at $40 per bottle and a California varietal wine (c) priced at $8. She allocates $600 to these two each month; and her utility is: U (f, c) = f2/3¹/3 (a) Write out her (constrained) utility maximization problem. Solve for the optimal consumption of wine f and c.

3*. Ms Smith likes to drink wine; in particular, a french bordeaux (ƒ) at $40 per bottle and a California varietal wine (c) priced at $8. She allocates $600 to these two each month; and her utility is: U (f, c) = f2/3¹/3 (a) Write out her (constrained) utility maximization problem. Solve for the optimal consumption of wine f and c.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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