Purchase Solution

Two Good Utility Maximization

Not what you're looking for?

Ask Custom Question

Two goods are consumed with respective price p_x and p_y. The utility function is given by u(x,y) = Min {2x + y, 2y} Income is 84

Suppose p_x = 3 and p_y = 2

How do I derive the optimal bundle/utility maximizing problem?

Purchase this Solution
Solution Summary

The expert examines two good utility maximization.

Solution provided by:
Robert Reinhart, MBA
Education
  • MBA, Merage School of Business, Univ of Cal, Irvine
  • BA, Univ of Cal, Irvine
Recent Feedback
  • "Thank you so much for your help, it was very helpful to see how you did it in excel. Thanks again!"
  • "Awesome review. Thank you!!!!!"
  • "Wow - Amazing - Thanks"
  • "Thanks"
  • "Thanks for your help. Your solution helps me understand the problem and its solution."
Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

View More Free Quizzes
Related BrainMass Solutions

  • Total utility, marginal utility, and utility maximization

    20828 Total utility, marginal utility, and utility maximization Can you please explain the concepts of total utility, marginal utility, and utility maximization.

  • exchange economy

    The solution covers concepts including utility maximization, consumer demand and consumer consumption.

  • Economics Budget Constraint / Bundle Consumption

    We can rearrange the first equation as MUx/MUy = 1, which tells us that utility maximization occurs when the MRS is one. Since it is two for bundle K, Jon can do better.

  • lexicographic, cardinal/ordinal utility,envelope, Hotelling's lemma, utility maximization

    In the context of the usual utility maximization problem involving n(>2) goods, prove that not all goods can be net complements and that at least one good must be normal. 2.

  • Finding the optimal consumption bundle

    498456 Finding the optimal consumption bundle Two consumers, Mamoon and Kader, consume only two goods, good 1 and good 2, with the quantities of each consumed denoted by x1 and x2 respectively.

  • Utility Maximization

    348250 Explain the difference between utility maximization from the consumption of a free good versus a good that is not free.

  • Economics: Sunk Costs and Utility

    Marginal utility is known to decrease with an increase in quantity. Equilibrium of the rational utility maximizer is obtained at a point where the last dollar spent on every good is considered to be equal.

  • Utility Maximization and Giffen Goods

    108474 In the context of the usual utility maximization problem involving n (>2) goods, prove that not all goods can be Giffen and that a Giffen good must have at least one gross complement.

  • Question

    20708 Question Please explain the concepts of total utility, marginal utility, and utility maximization. Define diminishing marginal utility and illustrate with two real-life examples - one for a business and one for an individual?

View More Related Solutions