Utility Functions

Question 1

U=xy (cobb douglas), Then x* and y*is?

Answer 1

x=m/2p1 and y=m/2p2

Question 2

U=x+y(Linear function), Then x* and y*is?

Answer 2

if p1/p2>MRS then,x=0 and y=m/p1

Question 3

U=min{x,y}, Then x* and y*is?

Answer 3

x=m/p1+p2 and y=m/p1+p2