4.6 Suppose that a consumers utility function for goods x, y and z is expressed according to...

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4.6 Suppose that a consumer’s utility function for goods x, y and z is expressed according to the Cobb–Douglas utility function U(x, y, z) = x 0.5y 0.5(1 + z)0.5.

Prices are given by px = 1, py = 4, and pz = 8.

Consumer income is given by I = 8.

Determine the utility maximising quantity of good z consumed.

4.7 a.

Explain why this quantity of good z is optimal?

Determine the minimum income required for the consumer to purchase product z.

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Microeconomic Theory Basic Principles And Extensions

ISBN: 9781473729483

1st Edition

Authors: Christopher M Snyder, Walter Nicholson, Robert B Stewart

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Question Posted: Nov 12, 2024 02:00 AM

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4.6 Suppose that a consumers utility function for goods x, y and z is expressed according to...

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Microeconomic Theory Basic Principles And Extensions

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