A student has a monthly budget of $800. She can spend her budget on two items, X and Y. Each unit of X costs $20 and each unit o

Question

3 years ago

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A student has a monthly budget of $800. She can spend her budget on two items, X and Y. Each unit of X costs $20 and each unit o

f Y costs $10. If the student has a utility function of U = 348X + 100Y + 6X2 + 4Y2 + 2XY, what is the optimal amount of X and Y for her to consume to have the maximum utility? What is this total utility? What is the value of lambda and what does this mean?

Mathematics

1 answer:

Aleonysh [2.5K] · Answer 1 · 2021-12-10T22:32:07+03:00

Answer:

Check the explanation

Step-by-step explanation:

Total utility is the overall satisfaction that a particular consumer received from consuming a given overall quantity of a good or service, To calculate the value of total utility economists utilize the following basic total utility formula: TU = U1 + MU2 + MU3

Kindly check the attached image below to see the step by step explanation to the question above.