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Determine the optimal quantities of both x1 and x2 for each utility function. The price of...

Determine the optimal quantities of both x1 and x2 for each utility function. The price of good 1 (p1) is $2. The price of good 2 (p2) is $1. Income (m) is $10.

a.) U(x1,x2) = min{2x1, 7x2}

b.) U(x1,x2) = 9x1+4x2

c.) U(x1,x2) = 2x11/2 x21/3

Please show all your work.

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Homework Answers

Answer #1
  1. x1 = 4.375, x2 = 1.25
  2. x1 = 5, x2 = 0
  3. x1 = 3, x2 = 4

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