List of top Economics Questions on Utility Maximization

An individual’s utility function for two goods milk (M) and butter (B) is given as U(M, B) = 5M - 10B and the cost of each unit of the two goods is Rs 1 and the individual’s weekly budget is Rs 5. Find the individual’s utility maximizing choice.

A utility maximizing consumer has a utility function given by \(U(X,Y)=2X+Y\). He has a budget constraint given by \(X+2Y=10\). In equilibrium he purchases: