Chrissy spends her income on fishing lures (L) and guitar picks (G). Lures are priced at $2, while a package of guitar picks cost $1. Assume that Chrissy has $30 to spend and her utility function can be represeted as U(L, G) = L^{0.5} G^{0.5} . For this utility function, MUL = 0.5L^{-0.5} G^{0.5} and MUG = 0.5L^{0.5 } G^{-0.5} .
What is the optimal number of lures and guitar picks for Chrissy to purchase?
How much utility does this combination bring her?
Answers: 3
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Chrissy spends her income on fishing lures (L) and guitar picks (G). Lures are priced at $2, while a...
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