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Page 3 C 8. (37 points total) Suppose Maxine has the following utility function U = 0.9*XY (MUX 0.6X MUY Answer the following questions and, as always, show your work. 0.3Y == and x (a) (6 points) On a regular day, Maxine earns $270. She currently faces the following prices Px = $9 and Py $1. What is her optimal consumption bundle of X and Y? (b) (2 points) How much does she spend per day on X and Y?

Page 3 C 8. (37 points total) Suppose Maxine has the following utility function U = 0.9*XY (MUX 0.6X MUY Answer the following questions and, as always, show your work. 0.3Y == and x (a) (6 points) On a regular day, Maxine earns $270. She currently faces the following prices Px = $9 and Py $1. What is her optimal consumption bundle of X and Y? (b) (2 points) How much does she spend per day on X and Y?

Microeconomics A Contemporary Intro
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter6: Consumer Choice And Demand
Section: Chapter Questions
Problem 13PAE
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Page 3 C 8. (37 points total) Suppose Maxine has the following utility function U = 0.9*XY (MUX 0.6X MUY Answer the following questions and, as always, show your work. 0.3Y == and x (a) (6 points) On a regular day, Maxine earns $270. She currently faces the following prices Px = $9 and Py $1. What is her optimal consumption bundle of X and Y? (b) (2 points) How much does she spend per day on X and Y?
Transcribed Image Text:Page 3 C 8. (37 points total) Suppose Maxine has the following utility function U = 0.9*XY (MUX 0.6X MUY Answer the following questions and, as always, show your work. 0.3Y == and x (a) (6 points) On a regular day, Maxine earns $270. She currently faces the following prices Px = $9 and Py $1. What is her optimal consumption bundle of X and Y? (b) (2 points) How much does she spend per day on X and Y?
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