Consider an individual with a utility function of the form U

Consider an individual with a utility function of the form: U(x,y)=xy , and where m=10, px=1, and py=2 , where m is the individual\'s income or wealth, p_i is the price of good i.

Calculate the individual\'s optimal consumption bundle, (x,y) = (Blank 1,Blank 2).

If your answer is a decimal, enter it to 1 decimal place (e.g. 5.5).

Please Explain.

U = xy

Budget line: 10 = x + 2y

MUx = dU / dx = y

MUy = dU / dy = x

MRS = MUx / MUy = y / x

Consumption is optimal when (MUx / MUy) = (px / py)

y / x = 1 / 2

x = 2y

Substituting in budget line,

10 = x + 2y

10 = x + x = 2x

x = 10/2 = 5

y = x/2 = 5/2 = 2.5

Optimal (x, y) = (5, 2.5)

$Consider an individual with a utility function of the form: U(x,y)=xy , and where m=10, px=1, and py=2 , where m is the individual\'s income or wealth, pi is th$

Consider an individual with a utility function of the form U

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