Donald consumes goods x and y.His utility function is U(x, y)=xy³.He is endowed with 10 units of x and 15 units of y.The price of x is $1 and the price of y is $2.Find his net demand for x. A)15 B)0 C)12 D)-3 E)20

Question

Quizplus · Accepted Answer

Given the utility function U(x, y) = xy, Donald's endowment, and the prices of x and y, his net demand for x is 0 because he will consume his endowment without needing to purchase more or sell any of his initial endowment.

Donald Consumes Goods X and Y