A consumer has the following utility function (shown in image) where ? is the number of spa days and ? is the number of city breaks consumed. Suppose that the price of a spa day is £200 and the price of a city break is £300. (i) Set up the economic problem and find the numbers of spa days and city breaks that minimise expenditure if 12,800 units of utility are to be obtained.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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A consumer has the following utility function (shown in image) where ? is the number of spa days and ? is the number of city breaks consumed.

Suppose that the price of a spa day is £200 and the price of a city break is £300.

(i) Set up the economic problem and find the numbers of spa days and city breaks that minimise expenditure if 12,800 units of utility are to be obtained.

U(X,Y)= 400X²/5y3/5
Transcribed Image Text:U(X,Y)= 400X²/5y3/5
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