Assume that Rossi consumes only bananas and avocado. Fortunately, she likes both goods. The consumption bundle where Rossi consumes x1 units of bananas per week and x2 units of avocado per week is written as (x1, x2). In fact, Rossi’s preferences can be represented by the utility function u (x1,x2 )=4√(x1 )+ x2 . The price for bananas is $1 per unit and the price for avocado is $2 per unit. Rossi has $24 to spend on the two goods. Write down Rossi’s budget constraint and solve for her optimal consumption bundle.

Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 11SQ
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Assume that Rossi consumes only bananas and avocado. Fortunately, she likes both goods. The consumption bundle where Rossi consumes x1 units of bananas per week and x2 units of avocado per week is written as (x1, x2). In fact, Rossi’s preferences can be represented by the utility function u (x1,x2 )=4√(x1 )+ x2 . The price for bananas is $1 per unit and the price for avocado is $2 per unit. Rossi has $24 to spend on the two goods. Write down Rossi’s budget constraint and solve for her optimal consumption bundle.
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