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?