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victus00 [196]
4 years ago
11

​Vasco's utility function​ is: Upper U equals 10 Upper X squared Upper ZU = 10X2Z The price of X is px​ = ​$55​, the price of Z

is pz​ = ​$2020​, and his income is ​$150150. What is his optimal​ bundle? ​(round your answer to two decimal​ places)
Business
1 answer:
disa [49]4 years ago
6 0

Answer:

Explanation:

U = 10 X²Z

Given

150 = 5X + 20Z

30 = X + 4Z

To maximise utility

differentiating partially wrt X

MU_x = dU/ dX = 20XZ

differentiating partially wrt Y

MU_y = dU/dY = 10X²

For optimal bundle

MU_x / MU_y = P_x / P_y

20XZ /  10X² = 5 / 20

2Z / X = 1/4

X = 8Z

30 = X + 4Z

30 = 8Z + 4Z

12Z = 30

Z = 2.5

X =  8 X 2.5

= 20

X = 20

Z = 2.5

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