What is the maximum level of utility the consumer recieves

Reference no: EM13179383

Suppose a consumer derives utility from consuming two goods, X1 and X2. Her utility function is given as U (X1, Y1) = 8 square root x1 x2.

The consumer must pay $20 for good 1 and $15 for good 2. The consumer's monthly income is $6,000.

A) determine the optimal quantities of X1 and X2 the consumer should purchase in order to maximize their utility.

B) what is the maximum level of utility the consumer recieves?

C) plot in the goods space the budget constraint and the indifference curve representing the maximum utility in this problem. Also indicate the optimal consumption combination, as well as the values of the slope and intercepts associated with the budget constraint.

Reference no: EM13179383

Questions Cloud

Explain benzoic acid can be extracted from an ether solution : Benzoic acid can be extracted from an ether solution using an aqueous solution of sodium bicarbonate.

Explain what is the percent yield of hcn : The equation for the reaction is 2 NH3 + 3 O2 + 2 CH4 ----> 2 HCN + 6 H2O, What is the percent yield of HCN?

Determine the max capacity for the orbital : what is a general formula that can be used to determine the max capacity for the following- a shell

State express the original concentration of cscl solution : After all the water is evaporated from 10.0 mL of a CsCl solution, 3.75 g of CsCl remains. Express the original concentration of CsCl solution in each of the following units.

What is the maximum level of utility the consumer recieves : The consumer must pay $20 for good 1 and $15 for good 2. The consumer's monthly income is $6,000. A) determine the optimal quantities of X1 and X2 the consumer should purchase in order to maximize their utility. B) what is the maximum level of utilit..

Explain what is the molarity of the final na2so4 solution : A solution is prepared by dissolving 30.0 g of Na2SO4 in enough water to make 750.0 mL of solution. A 10.00 mL portion of this solution is then diluted to a final volume of 100.0 mL.

Describe the maximum level of utility joe receives : If Joe's income is $5,040 a month, and the price of goods X1 and X2 are $45 and $5 respectively, derive the following: A) The quantity of X1 and X2 that maximize Joe's utility B) The maximum level of utility Joe receives.

Write the chemical equation for the particular titration : In an acid base titration a 25mL portion of a solution containing sulfuric acid (H2SO4) was titrated with a 0.200M NaOH(aq). write the chemical equation for this particular titration

Define the gdp deflator price index : An analyst locates a study that estimates the average beachgoer was willing to pay $2.25 per hour in 2000 to visit a renourished beach. What is the value of this in 1999 dollars?c. An analyst determines that the real operating expenses for a sewa..

User Account

All Pages