Answer to Question #38909 in Microeconomics for dan

Question

Derin's utility function is U = min {a1, a2} min {b1, b2}, where a1 and a2 are the number of piano lessons he consumes this year and next and b1 and b2 are the number of ice skating lessons he consumes this year and next. The price of piano lessons is $10 each and the price of ice skating lessons is $4 each. The prices won't change, but the interest rate is 7%. If Derin consumes 20 piano lessons this year, how many ice-skating lessons will he consume next year?