1. Suppose Felix obtains utility from consuming good X and good Y. His utility function is given by: U = X2Y Felix's income is $120, the price of good X is $20 and the price of good Y is $4.

a. State the two criteria that must be met for utility maximization both in words that describe the situation and as an algebraic expression

b. Use these two criteria to solve for Felix's utility maximizing quantities of good X and good Y. Be sure to show all your work.

c. Carefully and precisely state the law of demand.

d. Now suppose the price of good X decreases to $10. Calculate Felix's new utility maximizing quantity of good X and good Y showing all your work.

e. Use the information above to complete the following table and to sketch Felix's demand curve for good X. Be sure to label the axes properly.