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Imagine there are two series of science-fictions: The Three-Body Problem (T) and Galactic Empires (G). Your utility function is U = TG, where T is the number of books you consume for The Three-Body Problem, and G is the number of books you consume for Galactic Empires. If your budget is $200, the price of each book of The Three-Body Problem (T) is $50, and the price of each book of Galactic Empires (G) is $100, how many books of The Three-Body Problem (T) will you consume?

Respuesta :

jepessoa

Answer:

2 books

Explanation:

your utility function is:

F(U) = TG

In order to maximize your utility you must at least buy 1 book of the Three-Body Problem (T) and 1 book of the Galactic Empires (G). The constraint here is that both T and G must be ≥ 1. Since your budget is only $200, the maximum number of G books that you can buy is 1, or you wouldn't have any money left to buy T books.

So you purchase 1 G book and you have $100 left which you can use to purchase 2 T books.

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