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(Solved): Marc has the following utility function of U = 8\sqrt{x_2} + 16x_1; where x_1and x_2 are the two goo ...



Marc has the following utility function of U = 8\sqrt{x_2} + 16x_1; where x_1and x_2 are the two goods consumed by him. His income is Y= $2460, and the goods are sold at p_1 = $240 and p_2 = $4 at the market. a) (9 pts.) Compute his optimal choice. b) (6 pts.) Graph Marc’s optimal choice by marking x-axis as x_1and y-axis by x_2. Your graph should include the budget line, the indifference curve, and the optimal consumption point.



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