A consumer derives utility from two goods (x and y), and her utility function is in the form u(x,y) = xy. Her income is 120 TL, and the prices of x and y are both 1 TL: a) Find the quantities of x and y that maximizes her utility. b) Derive the demand functions for x and y.

A consumer derives utility from two goods (x and y), and her utility function is in the form u(x,y) = xy. Her income is 120 TL, and the prices of x and y are both 1 TL: a) Find the quantities of x and y that maximizes her utility. b) Derive the demand functions for x and y.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter20: Consumer Choice: Maximizing Utility And Behavioral Economics

Section: Chapter Questions

Problem 1WNG

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Question

A consumer derives utility from two goods (x and y), and her utility function is in the form u(x,y) = xy. Her income is 120 TL, and the prices of x and y are both 1 TL:

a) Find the quantities of x and y that maximizes her utility.

b) Derive the demand functions for x and y.

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