Question

There are two goods that you can spend your income on; good X and good Y. The price of good X is Px and the price of good Y is Py. The level of income is N$1800 and tour utility function is

Answer 1

N$1800 = PxX ≤ PyY

Step-by-step explanation:

Utility is the sanctification a consumer services from consuming a good or a service.

An utility function measures the preferences of a consumer over a set of goods or services.

given income of $1,800 and prices px and py, a consumer has to choose a bundle of good that maximises utility given income as total expenditure cannot exceed income