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U(X,Y)=lnx +2lny
a) What is the optimal choice when the consumer faces a budget 3x+y=225? call this bundle A(25,150)
b) Suppose Px becomes 5, giving us 5x+y=225, what is the new optimal? with bundle (15,150)
c) Suppose the consumer's income increases to M, find M if it is known that bundle A is on the new budget line 5x+y=M (275)
d) What is the consumer's optimal choice with budget 5x+y=M (18 and 1/3, 183) (use M that you found in part C) call this bundle D
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A: At 600 units of activity, marginal benefit is (rising, constant, positive, negative) because the tangent line at D is sloping (downward, upward).
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