4 4 a Mr Odde Ball enjoys commodities x and y according to the utility function Ux, y ffiffiffiffiffiffiffiffiffiffiffiffiffiffi x2 y2 p Maximize Mr Balls utility if px $3, py $4, and he has $50 to spend Hint It may be easier here to maximize U2 rather than U Why will this not alter your results b ...

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4.4 a. Mr. Odde Ball enjoys commodities x and y according to the utility function Ux, y...

Question:

4.4

a. Mr. Odde Ball enjoys commodities x and y according to the utility function Uðx, yÞ ¼ ffiffiffiffiffiffiffiffiffiffiffiffiffiffi x2 þ y2 p :

Maximize Mr. Ball’s utility if px ¼ $3, py ¼ $4, and he has $50 to spend. Hint: It may be easier here to maximize U2 rather than U. Why will this not alter your results?

b. Graph Mr. Ball’s indifference curve and its point of tangency with his budget constraint. What does the graph say about Mr. Ball’s behavior? Have you found a true maximum?

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