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Find the consumer optimal consumption bundle

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Suppose that item 1 is pumpkin and item 2 is milk. Suppose that m = 54. Suppose that pumpkins are p 1 = 2 each. Milk is p 2 = 7 per gallon for the ?rst two gallons. After the second gallon, it drops to 4 per gallon. Suppose that the consumer's utility function is u(x 1 , x 2 ) = x 1 +3x 2 . Sketch some indi?erence curves in your graph and the budget line - what can we say about the optimal bundle? Find the consumer's optimal consumption bundle (x ∗ , x ∗ ).

Reference no: EM133082578

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