Question
Asked Feb 18, 2020
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Mary spends all her budget on statistical software (S) and office supplies
(O). Her preferences can be represented by the utility function: U(S, O) =
2 ln(S) + 3 ln(O).

Suppose that the price of software is pS = 2, the price of office
supplies is pO = 3, and Mary’s income is I = 10. What bundle of
software and office supplies (S, C) maximizes Mary’s utility?

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Expert Answer

Step 1

Given,

Utility function: U(S, O) = 2 ln(S) + 3 ln(O).

Budget line, I = P...

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