Question please answer both a, b and c quickly.. 12. Given his utility function as his bundle as U=4XY and income, and prices of the goods in Yı= 1000, Px=4, Py=8 a. Find utility maximizing bundle for Hamza in year 1 and calculate his utility. b. If prices changes as follows, how much income should his employer pay him using COLA? Px2=5, Py2=16. Also find his utility maximizing bundle and calculate his utility in year 2. c. What if his employer used True COLA to adjust Hamza's income in the second year, how much income would he have received then? What would his utility be?

BGGCJA The Asker · Economics

please answer both a, b and c quickly..

Transcribed Image Text: 12. Given his utility function as his bundle as U=4XY and income, and prices of the goods in Yı= 1000, Px=4, Py=8 a. Find utility maximizing bundle for Hamza in year 1 and calculate his utility. b. If prices changes as follows, how much income should his employer pay him using COLA? Px2=5, Py2=16. Also find his utility maximizing bundle and calculate his utility in year 2. c. What if his employer used True COLA to adjust Hamza's income in the second year, how much income would he have received then? What would his utility be?
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Transcribed Image Text: 12. Given his utility function as his bundle as U=4XY and income, and prices of the goods in Yı= 1000, Px=4, Py=8 a. Find utility maximizing bundle for Hamza in year 1 and calculate his utility. b. If prices changes as follows, how much income should his employer pay him using COLA? Px2=5, Py2=16. Also find his utility maximizing bundle and calculate his utility in year 2. c. What if his employer used True COLA to adjust Hamza's income in the second year, how much income would he have received then? What would his utility be?
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IEHXMX

Given,Utility function =4xy{:[y_(1)=1000],[P_(x)=4],[P_(y)=8]:}Budget line =4x+8y=1000(a) Among the values:itility maximization requires.{:[(MUX)/(P_(x))=(MUY)/(P_(y))],[(4x)/(4)=(4x)/(8)],[Y=0.5 x],[=>4x+8xx0.5 x=1000],[=>4x+4x=1000],[8x=1000],[x=125],[Y=0.5 X],[Y=0.5 xx125],[y=62.5≃63]:}125 units of X and 63 units of Y{:[" utility "=4xx y],[=4xx125 xx63],[" utility "=31","500]:} ... See the full answer