Question
Kenny G spends all his income on two musical instruments: xylophones (x) and yotars (y). Kenny's utility function is U(x,y) = x^0.2y^0.8 and his income
Kenny G spends all his income on two musical instruments: xylophones (x) and yotars (y). Kenny's utility function is U(x,y) = x^0.2y^0.8 and his income is $50. Assume that xylophones cost $10 and yotars cost $10 per unit. Kenny has a general preference for ________. Since the instruments have the same price, we assume his optimal bundle will contain more ________. Kenny's budget constraint intersects the xylophone-axis at ________. His optimal bundle includes ________ xylophone(s) and ________ yotar(s). The utility he obtains from this bundle is equal to ________, which is higher than the utility he obtains from any other bundle he can afford, e.g. the bundle (2, 3) which gives him a utility of ________. * If you cannot evaluate the utility Kenny gets from a bundle on your calculator, write in the expression you would evaluate.
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