1.5. Maurice has the following utility function: U(X, Y) = 20X + 80Y X 2 ...

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1.5. Maurice has the following utility function:

U(X, Y) = 20X + 80Y − X2− 2Y2

where X is his consumption of CDs with a price of $1 and Y is his consumption of movie videos, with a rental price of $2. He plans to spend $41 on both forms of entertainment. Determine the number of CDs and video rentals that will maximize Maurice’s utility.

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Microeconomics

ISBN: 9780132080231

7th Edition

Authors: Robert S. Pindyck, Daniel L. Rubinfeld

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