Take Test... O 1/5 Kri 2.5 points QUESTION 30 Charlie has utility function U(xy)

Question

Take Test... O 1/5 Kri 2.5 points QUESTION 30 Charlie has utility function U(xy)-24x1/2+y. If he maximizes her utility, what is the amount of good x that he consumes, when price of x is 4, price of y is 1, and income is 50 (in this case utility maximization is characterized by the tangency rule)? O 3 0 1 0 9 O o 21/2 QUESTION 31 2.5 points Juno has preferences that are represented by the utility function U(x.y)-x1/2y1/2 (this preference is smooth, which implies that maximizers are interior). If Juno has income Y-$1000 and ny0

Explanation / Answer

Mux/MUy = Px/Py

MUx = dU/dx = 24*1/2*x^(1/2-1) = 12/x^(1/2)

MUy = 1

Px = 4

Py = 1

12/x^(1/2) = 4/1

x^(1/2) = 12/4 = 3

squaring both sides we can get

x = 9 so the amount of x that will be consumed is 9 units.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.