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Suppose that you know your utility structure is U(x)=(b1+x1)^a1*(b2+x2)^a2. You also know the following information a1=0.5 a2=0.33 b1=1 b2=3 The price of the two goods

Suppose that you know your utility structure is

U(x)=(b1+x1)^a1*(b2+x2)^a2.

You also know the following information

a1=0.5

a2=0.33

b1=1

b2=3

The price of the two goods are

p1=2

p2=1

Your income is 60.

1. Please solve for the optimal consumption bundle (x1, x2).

2. Please use the budget curve and indifference curve to show why your choice of consumption bundle is optimal.

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