Question

the utility function of an individual is given by U(x,y)=2x^2+y^2. he has an income of $100. the price of x is $2 and that of y is $1 per unit. how many units of x and y should this individual consume?

Answer 1

what level econ is this for...I ask because that kind of depends on how we should approach the answer. Assuming its relatively high level you would set up the langrangian function for this utility and budget constraint. you would get L=2x^2+y^2-l(100-2x-y). Take your 3 partial derivatives and you are left with 3 equations and 3 unknowns and its pretty straight forward to solve from there. Again let me know if you want some more help but thats the basic first steps.

Answer 2

so you have a goal to get to the final answer would be x=33 1/3 and y=33 1/3

Answer 3

thanks a lot...