A. Alice consumers two goods, x and y. Her utility function is U(x, y) = 10 ln(2x + 2y) + 2y. The prices for x and y are p and py (in dollars per unit), respectively. Alice has an income of m dollars. Find Alice's optimal bundle as a function of pa, Py, and m. [Hint: Be aware of corner solutions!] [Recall that MUx|(x,y) 10 10 (x+y) and MUy|(x,y) = +2.] (x+y) =

A. Alice consumers two goods, x and y. Her utility function is U(x, y) = 10 ln(2x + 2y) + 2y. The prices for x and y are p and py (in dollars per unit), respectively. Alice has an income of m dollars. Find Alice's optimal bundle as a function of pa, Py, and m. [Hint: Be aware of corner solutions!] [Recall that MUx|(x,y) 10 10 (x+y) and MUy|(x,y) = +2.] (x+y) =

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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jack consumes bananas and cheese. y units of cheese costs f(y) = ________ liras. Bananas have usual linear pricing with unit price of ____ liras per unit. jack has an income of ____ liras and his utility is U(x,y) = ____________, where x is banana consumption and y is cheese consumption. Fill in the blanks with suitable values and according to that values solve questions. a) Sketch jack’s budget curve. b) Calculate the amount of bananas and cheese jack demands at given pricing scheme and income.
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