Question
a. A utility maximizing consumer of two goods x and y has a Cobb-Douglas utility function shown below: U=x0.2y0.8 The price of x and y
a. A utility maximizing consumer of two goods x and y has a Cobb-Douglas utility function shown below:
U=x0.2y0.8
The price of x and y is Px and Py respectively. The consumer has a fixed income of M.
You are required to:
find the optimal values of x and y by applying FOC.
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Managerial Economics And Financial Analysis
Authors: M.S. Bhat, A.V. Rau
1st Edition
9352300211, 978-9352300211
