Answer to Question #138452 in Microeconomics for Isa

Question

Given a consumer who has a utility function described as U=2x^2. The consumer buys positive amounts of the good(x) whose market price is $18 per unit. How much of good X does the consumer buy and consume?

Answer 1

The utility function of the consumer has no maximum value, because MU = TU'(x) = 4x = 0 only if x = 0.

So, we need to know the consumer's budget to find the maximal possible quantity consumed, at which the total utility is maximized.