1. Liz has utility given by ?(?1,?2)=?1^7?2^3. If?1=$10,?2=$15,and I = $100, find Liz’s optimal consumption of good1. (Hint: you can use the 5 step method or one of the demandfunctions derived in class to find the answer). Â
a) Using the information from question 1, find Liz’s optimalconsumption of good 2.
3. Lyndsay has utility given by ??(?1,?2)=min {?1,?2}. If?1=$2,?2=$4, ? ?=$12, find Lyndsay’s optimal consumption of good 1.(Hint: this is Leontief utility).
a) Using the information from question 3, find Lyndsay’s optimalconsumption of good 2.
5. Anya has utility given by ??(?1,?2)=12?1+9?2. If ?1=$4,?2=$2,?=$20, find Anya’s optimal consumption of good (Hint: this islinear utility).
a) Using the information from question 5, find Anya’s optimalconsumption of good 2.
