An individual utility function is given by U(x, y) = ½ x + 1 y. This individual budget constraint is 4 = 2 x + 1 y. At the point at which this individual maximizes her utility level, she buys how many unit(s) of x and how many unit(s) of y?
An individual utility function is given by U(x, y) = ½ x + 1 y. This individual budget constraint is 4 = 2 x + 1 y. At the point at which this individual maximizes her utility level, she buys how many unit(s) of x and how many unit(s) of y?
Chapter1: Making Economics Decisions
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An individual utility function is given by U(x, y) = ½ x + 1 y. This individual budget constraint is 4 = 2 x + 1 y. At the point at which this individual maximizes her utility level, she buys how many unit(s) of x and how many unit(s) of y? Please explain the each step of how to solve this problem.
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Step 1
The utility function assesses a consumer's well-being or satisfaction as a function of the consumption of tangible goods such as food or clothing. In rational choice theory, the utility function is widely used to analyze human behaviour.
A budget constraint is the total number of items you can afford within your current budget. A budget constraint illustrates the range of options available within that budget.
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