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Problem 5. A consumer purchases quantities of two commodities, fruit and chocolate, each month. The consumer's utility function is 5/6 1/3 u(x1, 12) = x" x3 for a bundle (x1, x2) of x1 units of fruit and x2 units of chocolate. The consumer has a total of $49 to spend on fruit and chocolate each month. Fruit cost $1 per unit and chocolate costs $2 per unit. How many units of each should the consumer buy each month in order to maximise her utility? Find x and . Determine X* and V(M) = u(x;, x;) if budget is M and av prices are pi and p2. Verify that ƏM = \*.

Problem 5. A consumer purchases quantities of two commodities, fruit and chocolate, each month. The consumer's utility function is 5/6 1/3 u(x1, 12) = x" x3 for a bundle (x1, x2) of x1 units of fruit and x2 units of chocolate. The consumer has a total of $49 to spend on fruit and chocolate each month. Fruit cost $1 per unit and chocolate costs $2 per unit. How many units of each should the consumer buy each month in order to maximise her utility? Find x and . Determine X* and V(M) = u(x;, x;) if budget is M and av prices are pi and p2. Verify that ƏM = \*.

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Problem 5. A consumer purchases quantities of two commodities, fruit and chocolate, each month. The consumer's utility function is 5/6 1/3 u(x1, 12) = x" x3 for a bundle (x1, x2) of x1 units of fruit and x2 units of chocolate. The consumer has a total of $49 to spend on fruit and chocolate each month. Fruit cost $1 per unit and chocolate costs $2 per unit. How many units of each should the consumer buy each month in order to maximise her utility? Find x and . Determine X* and V(M) = u(x;, x;) if budget is M and av prices are pi and p2. Verify that ƏM = \*.
Transcribed Image Text:Problem 5. A consumer purchases quantities of two commodities, fruit and chocolate, each month. The consumer's utility function is 5/6 1/3 u(x1, 12) = x" x3 for a bundle (x1, x2) of x1 units of fruit and x2 units of chocolate. The consumer has a total of $49 to spend on fruit and chocolate each month. Fruit cost $1 per unit and chocolate costs $2 per unit. How many units of each should the consumer buy each month in order to maximise her utility? Find x and . Determine X* and V(M) = u(x;, x;) if budget is M and av prices are pi and p2. Verify that ƏM = \*.
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