Question

Ted’s utility function over goods 1 and 2 is given by:
U(x_{1},x_{2}) =
4x_{1}^{1/2}x_{2}^{1/4}. What is
Ted’s demand for goods 1 and 2 if the price of good 1 is 1, the
price of good 2 is 2, and Ted has $18 to spend?

Group of answer choices

A.) (x1, x2) = (12,3)

B.) (x1, x2) = (4,7)

C.) (x1, x2) = (6,6)

D.) (x1, x2) = (2,8)

Answer #1

Ans. A. ) ( x1, x2 ) = ( 12, 3)

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