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Posted by on Thursday, August 14, 2008 at 6:20am.

Given the utility function

U(C,T) = 3C+2T

A budget constraint of $50, C = coffee which is $2 a cup, and T = tea which is $1.25 a cup, what is the optimal consumption bundle, and maximum utility possible?

Also derive an expression for the demand curve for coffee given the price of tea and the budget constraint.

  • Microeconomics - , Thursday, August 14, 2008 at 8:57pm

    A good is inferior if

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