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- September 13, 2020
- By menge

Suppose that a consumer’s utility function for two goods (X and Y) is U(X,Y)=10X^0.5 + 2Y.

Price of X is $5 per unit, and price of Y

is $10 per unit. Suppose the consumer must have 80

units of utility, what would be his optimal consumption bundle?

A) Write a statement of the constrained optimization problem

B) Use a Lagrangian to the expenditure minimization problem