Question

price of good x=12,price of good y=4,income of consumer 240
a)find the utility max of combination o x and y

Answer 1

Px=12 and Py=4, income of consumer, I=240

The utility of max combination `UMC` is given by;

$I*UMC= Px/Py$

UMC=3/240 =0.0125