Answer to Question #350801 in Differential Equations for kevin

Question

(b) A consumer has a utility function of the form; U = X.Y Where Xand Y are any two goods. Given further that; The price of goodsX (Px) = Kshs. 8 The price of good Y (Py) = Kshs. 20 Theconsumers income (I) = Kshs. 1000

(i) Calculate the number of units that the consumer should consume in order to maximize utility. (10 marks)

(ii)What is the maximum utility the consumer derives from the consumption of the two goods. (2 marks)

Answer 1

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