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Problem 2 (30 points) A consumer's utility for bundle x and y is given by the Stone-Geary Utility Function. The subsistence consumption levels for
Problem 2 (30 points) A consumer's utility for bundle x and y is given by the Stone-Geary Utility Function. The subsistence consumption levels for x is 20 units, while for y it is 50 units. Define the consumer's utility function given share parameters a = 0.4 and = 0.6 for bundle x and y, respectively. If the price of x and y are = 2 and = 1, respectively, and the budget of the consumer is b = 200, find the optimum quantity and as well as the utility at these levels. (Note: You may simply use the Maximize command.) Plot the consumer's indifference curve at and their budget line in a single space. Plot bundle y at the vertical axis and bundle x at the horizontal axis. (Note: Use the dbmain (x, 0, 100) and PlotRangeAutomatic.)
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