67 027
Assignments Done
99,3%
Successfully Done
In November 2018

Answer to Question #52346 in Microeconomics for lawrence

Question #52346
Diogo has a utility function , where A, α and β are constants, B is burritos, and Z is pizzas. If the price of burritos, Pb, is N$2 and the price of pizzas, Pz is N$1, and Y is N$100, what is Diogo’s optimal bundle?
Expert's answer
If Diogo has a utility function U(B, Z)  = AB^αZ^β and if the price of burritos, Pb, is N$2 and the price of pizzas, Pz is N$1, and Y is N$100, using the Lagrangian method we can find the optimal bundle:
Qb =  β/(α + β)*100/2 = 50β/(α + β)
Qz = 100β/(α + β)

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

Submit
Privacy policy Terms and Conditions