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Alicia likes watching Netflix and listening to Spotify. Let x_N denote the number of hours she watches Netflix per month and x_S be the number
Alicia likes watching Netflix and listening to Spotify. Let x_N denote the number of hours she watches Netflix per month and x_S be the number of hours she listens to Spotify. An hour of Netflix costs $2, every hour of Spotify is $1. Her monthly budget for these two goods is $40.
Her utility function is given by u(x_N, x_S) = (x_N)^3(x_S). Hence,
MU_N = 3(x_N)^2(x_S)
MU_S = (x_N)^3
Her optimal bundle is hours of Netflix and hours of Spotify.
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