Question
Faa's utility function for coffee (good X) and muffins (good Y) is given as (x,y)= x 0.5 y 0.5 . If she has $192 budget
Faa's utility function for coffee (good X) and muffins (good Y) is given as(x,y)= x0.5y0.5.
If she has $192 budget to spend on coffee on muffins. And the price of coffee is $8.00 (Px = 8), and the price of muffin is $16.00 (Py = 16). If coffee(good X)is graph on the horizontal axisand muffins (good Y) on the vertical axis.Faa's utility-maximizing consumption of coffee is and muffin is .(Please input your answers in numerical values only without any decimal place or comma).Faa is offered a job in another city. Due to the high cost of living in that city, she is offered an income allowance of $8 to add to her coffee and muffin budget, the prices in the new city she's offered the job are $10.00 per cup of coffee and $20.00 for a muffin. Faa'soptimal consumption of coffee will be and muffin will be if she moved to take the job.(Please input your answers in numerical values only without any decimal place or comma).Should Faa take the offer? (hint: consider Faa'sutility in her old city and her utility in the city she's offered the job.)(Please put your answer as yes or no, lower cases only.)
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