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A consumer consumes two (food) commodities, x and y. The consumer has utility function U(x,y) = 150-2(x-5) 2 - (y-5) 2 and faces the budget
A consumer consumes two (food) commodities, x and y. The consumer has utility function U(x,y) = 150-2(x-5)2- (y-5)2 and faces the budget constraint pxx + pyy m.
a) Assuming m=15 and both prices are 1, find the optimal consumption plan (x*, y*).
b) Assuming m=10, y p =2 and 1 x p = , find the optimal consumption plan (x*, y*).
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