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(10 marks) An individual consumes products X and Y and spends $25 per time period. The...

An individual consumes products X and Y and spends $25 per time period. The prices of the two goods are $3 per unit for X and $2 per unit for Y. The consumer in this case has a utility function expressed as:

MUx = 0.5Y MUy = 0.5X

  1. Express the budget equation mathematically.
  2. Determine the values of X and Y that will maximize utility in the consumption of X and Y.

(instead of drawing the actual graph, briefly explain the graph instead. Explain all the curves, shifts, points and axis, intersections and labels etc).

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