Suppose a consumer’s utility function is given a U = 100X0.25Y0.75.The prices of the two commodities X and Y are Birr 2 and Birr 5 per unit respectively. If the consumer’s income is Birr 280, how many units of each commodity should the consumer buy to maximize his/her utility?

/in /by

Suppose a consumer’s utility function is given a U =
100X0.25Y0.75.The prices of the two commodities X and Y are Birr 2 and
Birr 5 per unit respectively. If the consumer’s income is Birr 280,
how many units of each commodity should the consumer buy to maximize
his/her utility?

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