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Casper has preferences u = x1/3y1/3 for electricity x and good y. He has income of $12 and pays pY= 1. The provincial government prices
Casper has preferences u = x1/3y1/3 for electricity x and good y. He has income of $12 and pays pY= 1. The provincial government prices electricity to encourage conservation; the more electricity Casper consumes, the higher the price his has to pay per kilowatt. To purchase x units of electricity will cost him x2dollars. How much good y will he purchase? No diagram is required.
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