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QUESTION ON THE PHOTO Consider an individual whose preferences over two goods, w and z, are represented by the utility function U(w, 2) = (witz)

QUESTION ON THE PHOTO

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Consider an individual whose preferences over two goods, w and z, are represented by the utility function U(w, 2) = (witz) 1/P. Assume that w's retail at P, per unit and that z's sell for P per unit. The individual wishes to spend at most $8. Solve for the individual's utility maximizing purchases, w*(p, P., P, B) and z*(p, P., P, B), under the following assumptions 1 0, w > 0,z>> 0 1 > O, w = 0,z >0 1 >O, W > 0,2 = 0 Then, if possible, solve for the optimal consumptions in the limit asp - 1. If you cannot derive a solution for a particular case, discuss why you cannot do so! For full credit, you must show all of your work

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