Question

A customer buys two goods x and y. The consumer's utility function is U(x,y) = x^1/3y^2/3-40. Find the coordinates that maximize x+y.

Answer 1

Given,

Differentiating U wrt x we get

Similarly,

At utility maximization the following condition must be satisfied

Here Price and income both are not provided therefore we cannot determine the exact coordinates. Let us assume the income is I

Similarly,

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