Answer to Question #207544 in Microeconomics for Memory Zulu

Question

4. If an individual’s preferences are described by the utility function U(X1 , X2 ) = X12 + X22,

a) graph the indifference curve for U = 20 and U= 40.

b) Find the optimal consumption quantities if P1 = US$2.50 ; P2 = US$ 7.50; and M = US$ 60.

Answer 1

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