Jake's preferences for goods X and Y are represented this utility function: U = X3Y27. Each unit of X costs $9. Each unit of Y costs $1. Jake has a budget of $450 a) Find Jake's optimal bundle. b) Assume the government subsidizes the first 10 units bought of good X. For the first 10 units of good X, the government gives Jake a rebate of $2. Find Jake's new optimal bundle.
Jake's preferences for goods X and Y are represented this utility function: U = X3Y27. Each unit of X costs $9. Each unit of Y costs $1. Jake has a budget of $450 a) Find Jake's optimal bundle. b) Assume the government subsidizes the first 10 units bought of good X. For the first 10 units of good X, the government gives Jake a rebate of $2. Find Jake's new optimal bundle.
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 25SQ
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![Jake's preferences for goods X and Y are represented this utility function: U = X3Y27.
Each unit of X costs $9.
Each unit of Y costs $1.
Jake has a budget of $450
a) Find Jake's optimal bundle.
b) Assume the government subsidizes the first 10 units bought of good X. For the first 10
units of good X, the government gives Jake a rebate of $2. Find Jake's new optimal
bundle.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F95222683-c1c5-44f3-ba3b-ec8a17877054%2F3b12d4fc-015e-40b9-a123-6fcc6f42a18c%2F77zaykg_processed.png&w=3840&q=75)
Transcribed Image Text:Jake's preferences for goods X and Y are represented this utility function: U = X3Y27.
Each unit of X costs $9.
Each unit of Y costs $1.
Jake has a budget of $450
a) Find Jake's optimal bundle.
b) Assume the government subsidizes the first 10 units bought of good X. For the first 10
units of good X, the government gives Jake a rebate of $2. Find Jake's new optimal
bundle.
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