A consumer’s weekly income is $5000, the price of a cell phone is $1250, and the price of a watch is $500. What quantity of cell phones and watches will maximize the consumer’s utility if they spend their entire weekly income on cell phones and watches? Explain your answer using marginal analysis.                         1A.  Suppose that this consumer’s income elasticity for watches is 5.4. what does this indicate about watches? If the cross-elasticity calculates to 0.8 what does this indicate about the relationship between watches and cell phones?

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A: Given that,  Donald's utility function U (X, Y) = X0.1 Y0.9M = $900PX = $45PY = $90

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Q: Donald derives utility from only two goods, carrots (X) and donuts (Y). His utility 0.1 0.9 Y Donald…

A: Donald's utility function U (X, Y) = X0.1 Y0.9 M = $900PX = $$45PY = $90

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