Question

suppose a consumer had a utility function given by: U-X075 Yo.8· lf the price of Good X (Ps) is $8 and the price of Good Y is $8 then what is the utility maximizing quantity of Good Y the consumer will purchase with a budget of $99.20? (Round to the nearest two decimal places if necessary.)

Answer 1

ANSCO FR utility function U = X 0.75, 0.8. Price of price of Good X - Goody = $8 $8. $99120 Budget - Budget constraint = kx + PyY= I - 8x+8y= 99.20. Willity Manionizing condition. Mche - proy Px Marginal wiility of partial differentiate the Wility function with respect tox Mux- 4008 0.75 -0.25 - 0.75 you x 0.25 Marginal willity of y. pastral differentiate the Wility function with respect toy.

My wo'я o dy o'2 0.8&ots yo* 2. . MUK & PX MUY 2 • ог гу"d 0 Ру 0:2 Yo’ 2 o'r P о: 1 ч 1 о в х • Гу= ofх хоо•2ГУ 018 put this vakre ofx 9 - 89 - 04. 20. in Budget constraint. 8 [ •19) - 84 = 091 20. ор- S 6 89 - 9: 20. 0.8 "ГЧ + 8 = 99, 2а 1. Ч. 49, 20

thor 426040 units. Quantity of goody is 6.40 units. Wility maximizing