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Microeconomics

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Maximization of Utility: Budget Not Included

MICRO-LX7ETN

Suppose that an individual’s utility function is given by $U(X,Y)=5X^{0.2}Y^{0.8}$.

If the price of good X is \$1, the price of good Y is \$2, and you are told that this consumer chooses to consume 12 units of Y, how many units of X does she consume?

A

The individual consumes 12 units of X.

B

The individual consumes 3 units of X.

C

The individual consumes 4 units of X.

D

The individual consumes 6 units of X.