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Malakai receive utility from consuming donuts (D) and coffee (C). Coffee is $2 per cup and donuts are $1 each. Assume that Malakai has $10
Malakai receive utility from consuming donuts (D) and coffee (C). Coffee is $2 per cup and donuts are $1 each. Assume that Malakai has $10 to spend, and his utility function is given by U(D,C)=(D to the power of 0.8)(C to the power of 0.5) . Based on the information above, calculate the following - assume Malakai can purchase fractional amounts of either good. Round answers to two places after the decimal. A) Malakai's optimal consumption bundle: ___donuts and ___ cups of coffee B) What is the amount of utility Malakai receives from his optimal bundle? ___ utils C) If the price of donuts doubles to $2, how much income does Malakai need to maintain the same level of utility? $___
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