2 An individual's utility function is given by U = x;X2 where x, and x, denote the number of items of two goods, G1 and G2. The prices of the goods are $2 and $10 respectively. Assuming that the individual has $400 available to spend on these goods, find the utility-maximizing values of x, and x2. Verify that the ratio of marginal utility to price is the same
2 An individual's utility function is given by U = x;X2 where x, and x, denote the number of items of two goods, G1 and G2. The prices of the goods are $2 and $10 respectively. Assuming that the individual has $400 available to spend on these goods, find the utility-maximizing values of x, and x2. Verify that the ratio of marginal utility to price is the same
Chapter6: Consumer Choice And Demand
Section: Chapter Questions
Problem 2.5P
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