A consumer has the following utility function: U= X1^.75X2^.25?

p1= 20 p2= 5 m= 200

Solve for the consumer’s optimal consumption of X1, X2, & consumer’s utility.

B. The city imposes a unit tax on good X1. The tax is equal to 1. Solve for X1, X2, and utility.

c. The city imposes an income tax equal to 1. Solve for X1, X2, and utility.

Top 1 Answers

A few days ago

Anonymous

Favorite Answer

No customer on the planet has that kind of utility function. People buy electricity, gas, water, garbage service, etc. , not X’s and p’s ..

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