Answer to Question #200283 in Microeconomics for Vision

Question

Mary has a utility function U (B,Z) =



AB

Z



, where A,



,





are constants, B is the quantity

of burritos she buys at price pb, and Z is the quantity of pizzas she buys at price pZ and

assuming that her income is represented by Y.

(i) Set the equation representing her budget constraint (2 marks)

(ii) Calculate the optimal quantity of burritos and pizza she will consume? (Hint: use the

Lagrangian method.). (13 marks)

Answer 1

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