Problem 1

Text: A family has to decide how much of their monthly income to spend on good 1 and good 2. Suppose that this household has a fixed income of $1800 per month. Further, suppose that the price of good 1 is p1=$6 and the price of good 2 is p2=$3. Finally, suppose that the tastes of the household are described by the utility function (₁, ₂), where denotes the quantity of good 1 and ^₂ the quantity of good 2.