The utility function of a buyer for x units of tea and y units of coffee is given by u(x, y) = x ^\alpha \times y ^\beta where 0 < \alpha < = 1 and 0 < \beta < = 1. The buyer can spend a maximum amount of R in the tea - coffee shop, where unit prices of tea and coffee are p and q respectively. What amount of tea and coffee the buyer can purchase to maximise her utility? tea and coffee the buyer can purchase to maximise her utility?

The utility function of a buyer for x units of tea and y units of coffee is given by u(x, y) = x ^\alpha \times y ^\beta where 0 < \alpha < = 1 and 0 < \beta < = 1. The buyer can spend a maximum amount of R in the tea - coffee shop, where unit prices of tea and coffee are p and q respectively. What amount of tea and coffee the buyer can purchase to maximise her utility? tea and coffee the buyer can purchase to maximise her utility?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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