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Topic - Utility Maximization , need help; do not understand how to solve ; please explain graph Utility maximization Let 2:1 2 0 and 9:2

Topic - Utility Maximization ,

need help; do not understand how to solve ; please explain graph

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Utility maximization Let 2:1 2 0 and 9:2 2 0 be the levels of consumption of good 1 and good 2, respectively. Assume that I : 100, p1 : 2, and p2 = 4. Suppose that for each unit of good 1 that is purchased, the agent is given 1/4 units of good 2 for free. Resale of good 2 is not allowed. (a) The utility function is Man, 332) : 271 + 2:122. Find {m'f, 37;} and sketch the budget line and a couple of indifference curves to illustrate the solution. (b) The utility function is u(a:1,a:2) = 3:1 + 801m 332. Find {331,333} and sketch the budget line and a couple of indifference curves to illustrate the solution

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