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John Paul derives utility from the consumption of cigars and brandy on friday evenings. His utility from c cigars and b glasses of brandy is
John Paul derives utility from the consumption of cigars and brandy on friday evenings. His utility from c cigars and b glasses of brandy is given by: U(c,b) = 200 c2 + 18b 3132 (a) First nd Ucb. Interpret you answer: What does your answer mean to J .P? (b) Suppose cost or money is not a problem for J .P. How many cigars and glasses of brandy will he consume on a friday evening? Verify that your answer indeed maximizes U [Hintz Hessian] (0) Continue to assume cost is not a problem. However, J .P's doctor advises that he should limit the sum of glasses of brandy and cigars consumed to 5; i.e., 0+!) = 5. What is the optimal consumption given this advice
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