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A consumer has preferences for two goods, which can be represented with the following utility function: u(x1, x2) = 4x1 + 3x2. (a) If consumer has budget of 20AZN, while prices of goods are 2AZN and 4AZN, respectively, calculate the bundle that maximizes the welfare of this consumer. (b) If the budget of the same consumer changes to 40AZN, while prices remain unchanged, calculate the bundle that maximizes the welfare of this consumer. (c) If the budget of the consumer remains unchanged at 40AZN, while price of good 1 increase to 8AZN, calculate the bundle that maximizes the welfare of this consumer.
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What is the optimal objective function value, and what are the optimal values of variables?
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