Kai spends his income on lime (L) and ginger water (G). Lime is priced at $2, while ginger water costs $1. Suppose Kai has $30 to spend and his utility function can be represented as U(L,G)= L0.5 G0.5 a. What is the optimal number of lime and ginger water for Kai to purchase? b. How much utility does this combination bring him?

Kai spends his income on lime (L) and ginger water (G). Lime is priced at $2, while ginger water costs $1. Suppose Kai has $30 to spend and his utility function can be represented as U(L,G)= L0.5 G0.5 a. What is the optimal number of lime and ginger water for Kai to purchase? b. How much utility does this combination bring him?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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