eferences can be represented by the utility function 1 u(x, y) : x +2/y. = - 2 me Zack has income m = 27 and faces prices p = 6 per unit %3D good and q = 3 per unit of the second good. Find Zack's of lle.

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Chapter21: The Theory Of Consumer Choice
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Zack's preferences can be represented by the utility function
1
u(x, y) = r + 2J.
x +2/y.
1. Assume Zack has income m = 27 and faces pricesp= 6 per unit of the
first good and q = 3 per unit of the second good. Find Zack's optimal
bundle.
2. Assume Zack has income m = 36 and the price of the second good is
q = 4. Find Zack's demand for the first good, x(p).
Transcribed Image Text:Zack's preferences can be represented by the utility function 1 u(x, y) = r + 2J. x +2/y. 1. Assume Zack has income m = 27 and faces pricesp= 6 per unit of the first good and q = 3 per unit of the second good. Find Zack's optimal bundle. 2. Assume Zack has income m = 36 and the price of the second good is q = 4. Find Zack's demand for the first good, x(p).
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The equilibrium is set up where the slope of indifference curve is equal to the slope of budget line. 

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