Asked • 02/14/21

Utility Maximization Subject to the Budget Constraint

Suppose a consumer buys two goods, X and Y, and his utility function is given by U (X,Y) = XY + 10Y. The prices of the 2 goods X and Y are given by PX = $1 and PY = $2. The consumer has an income of $10. What is the consumer's optimum consumption bundle of the goods X and Y? Is the optimum bundle an interior optimum or a corner optimum?

1 Expert Answer

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Anindita P. answered • 02/14/21

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