If Utility function is of form U = 50(x2)3 + Ln(x1), with prices of goods of the form p1=5 and p2=12. If monetary income is $15.000, determine optimal quantities for x1 and x2 and establish utility obtained by consumer.

Utility function : U = 50(x2)3 + Ln(x1)Price of good 1 : p1 = 5 Price of good 2 : p2 = 12 Income =…

Answered: If Utility function is of form U =…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If Utility function is of form U = 50(x₂)³ + Ln(x₁), with prices of goods of the form p₁=5 and p₂=12. If monetary income is $15.000, determine optimal quantities for x₁ and x₂ and establish utility obtained by consumer.

Expert Solution

Step 1: Describe the problem

Utility function : U = 50(x₂)³ + Ln(x₁)

Price of good 1 : p1 = 5

Price of good 2 : p2 = 12

Income = 15000

Therefore ,

Budget Constraint : 5x1 + 12 x2 = 15000

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I see some mistakes on solve equations for x2. Please review so is a grade-3 polinomic equation: 0,08/(x₂)² + 12x₂ = 15.000

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