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A consumer has utility function xy u(x, y) = x+y

A consumer has utility function xy u(x, y) = x+y

Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter7: Analytic Trigonometry
Section7.6: The Inverse Trigonometric Functions
Problem 94E
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AS FAST AS POSSIBLE PLEASE! PROBLEM 2 PART 2 

A consumer has utility function ху u(x, y) = x+ y %3D for two goods, where x >0 denotes the amount of X consumed and y> 0 the amount of Y consumed. Each unit of X costs p dollars, each unit of Y costs q dollars, and the consumer has a budget for X and Y of M dollars. Suppose that U(M) = u(x',y') is the maximum achievable utility. Find an explicit expression for U in terms of p, q and M, simplify your answer as much as possible. Find ƏM and verify that it is equal to 2".
Transcribed Image Text:A consumer has utility function ху u(x, y) = x+ y %3D for two goods, where x >0 denotes the amount of X consumed and y> 0 the amount of Y consumed. Each unit of X costs p dollars, each unit of Y costs q dollars, and the consumer has a budget for X and Y of M dollars. Suppose that U(M) = u(x',y') is the maximum achievable utility. Find an explicit expression for U in terms of p, q and M, simplify your answer as much as possible. Find ƏM and verify that it is equal to 2".
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