Question
Imagine you consume two goods, K and L, and your utility function is U = K 1/3 L 2/3 . Your budget is $120; P
Imagine you consume two goods, K and L, and your utility function is U = K1/3L2/3. Your budget is $120; PK = $6; PL = $9. So, the optimal bundle for you to consume is (K = 6.6667, L = 8.8889). Now, suppose the price of good K increases to $9. What is the new optimal K for you to consume?
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Survey of Economics
Authors: Irvin B. Tucker
8th edition
1111989664, 978-1133713357, 1133713351, 978-1111989668
