1.6 Solving the Consumer's Problem - Practice Problems
You can get utility from consuming Soda (s) and Hot dogs (h), according to the utility function:
u(s,h)=√sh
The marginal utilities are:
MUs=0.5s−0.5h0.5MUh=0.5s0.5h−0.5
You have an income of $12, the price of Soda is $2, and the price of a Hot dog is $3. Put Soda on the horizontal axis and Hot dogs on the vertical axis.