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Consider a consumer with preferences represented by the utility function: u(x; y) = x 1/4 y 1/2 Suppose the consumer has income M = 10
Consider a consumer with preferences represented by the utility function:
u(x; y) = x1/4y1/2
Suppose the consumer has income M = 10 and the prices are px = 1 and py = 2.
(a) Are goods x and y both desirable?
(b) Are there implications for the utility maximization problem for the consumer from your finding in a? If so, explain in detail.
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