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Now suppose with your help, George has managed to maximize his utility by choosing the optimal consumption bundle. But when he goes back to the
Now suppose with your help, George has managed to maximize his utility by choosing the optimal consumption bundle. But when he goes back to the shop the following week with the same weekly food allowance ($72), he finds the price of a soda is the same as before (i.e., $3) but the price of a knish has increased to $6. As to be expected, his utility function remains the same as before, i.e., U = 9X1X2. [Note, a consumer's preferences (represented by the utility function) are not likely to change overnight.]
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