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Sharon has the following utility function UXY √X √ Y Where X is her consumption of candy bars with price


Sharon has the following utility function: U(X,Y) = √X +√ Y Where X is her consumption of candy bars, with price PX = $1, and Y is her consumption of espressos, with PY = $3.

a) Derive Sharon’s demand for candy bars and espressos.

b) Assume that her income I = $100. How many candy bars and how many espressos will Sharon consume?

c) What is the marginal utility of income?

May 02 2020 View more View Less

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