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    utility function

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    Two consumers each have an income of $300, with which they buy good X (costing $5) and good Y (costing $4). If A's preferences are given by U_A = X^2 Y and B's preferences are given by U_B = X(Y+100), what is the optimal amounts of X and Y each will purchase?

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    Solution Summary

    This solution exemplifies how to find the optimal bundle in the given economics problem.