Question

Assume a budget constraint is given by 10 = x + y For each of the following utility function calculate the utility maximizing x and y and the resulting level of utility.

(a) U x/y
(b) U In(x) + In(y)
(c) U 2x2y

Answer 1

A) y = 0 , x = 10

B) x = 5 = y

c) x = 6.667, y = 3.333

Step-by-step explanation:

Budget constraint = x + y = 10

calculate the utility maximizing x and y and the resulting level of utility

attached is the detailed solution