Question

7)Jeff is mailing cards to friends, since he can’t see them right now. He likes both Hallmark cards and generic cards. Jeff’s utility function for greeting cards is given by U(H,G) = 5H3/5G2/5, where H represents the number of Hallmark cards he buys and G the number of generic cards he buys. Jeff misses lots of people so his budget for greeting cards is $100. The price of a Hallmark card is $5, and the price of a generic card is $1. Find how many cards of each type Jeff will buy to maximize his utility. If the price of a Hallmark card increases to $8, how many cards of each type will Jeff buy?

Answer 1