An individual’s utility function is given by U = x1 √ x2 where x1 and x2 denote the monthly consumption of two goods. Unit prices of these goods are $2 and $4 respectively, and the total monthly expenditure on these goods is $300. (a) Write down the budgetary constraint. (b) Find the optimal quantities of x1 and x2 the maximize U. (c) Verify that the stationary point is a maximum.

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