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U(X,Y)=MIN(3X,Y). The consumer has $60 to spend and the prices of the goods are Px=$2 and Py=$1. What is the optimal utility? 

 

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Kritika Krishnakumar
Kritika KrishnakumarLv10
28 Sep 2019

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Related questions

Cero has utility U = -{(x -50)^2+ (y -40)^2}, Px = Py = 1 and M = 100.

a.If he receives an additional 10 income how does he spend it? Just on x, just on y or some on x and some on y or on neither? Ted has utility U = 5x^2+ 8y^3 Px = 1 Py = 2 a.At what income is Ted indifferent between buying only x or only y?

b.If income were above the level found in part a, which good would he buy exclusively?

c.If income were below the level found in part a, which good would he buy exclusively?

d.Would the same answers for parts a, b, c hold true if utility were U = 10x^2+ 16y^3and why or why not?

Josh has utility U= -min{4x, 5y} Px=7 Py=10 M=140

a.What is the highest utility he can get?

b.What is his optimal point?

Ginger's utility function is \(U(x,y) = x^{2}y\). Prices are Px=8 and Py=2 and Income is I=240.

a) Determine Ginger's optimal basket given these prices and her income.

b) If Py increases to 8 and Ginger's income is unchanged, what must the Px fall to in order for her to be exactly as well off as before the change in Py. (hint: solve for the total utility in a) and then keep that constant to solve for the new Px)

Suppose that a consumer's preferences over two goods, x and y, are represented by a Cobb-Douglas utility function:

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Explain why the percentage increase is smaller than the increase inthe CPI for the consumer that you derived in part c.

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