2. Economics
3. phils utility function is ux13y23 where mux y23 ...

Question: phils utility function is ux13y23 where mux y23 ...

Question details

Phil’s utility function is U=X1/3Y2/3, where MUX = Y2/3 / 3X2/3 and MUY = 2X1/3 / 3Y1/3

In Los Angeles, Phil’s net income would equal $3000, and prices of good X and good Y are$2 and $5, respectively. In Washington, D.C., Phil’s net income would equal$4500, and the prices of good X and good Y are $4 and$6, respectively.

a)Where should Phil live if his goal is to maximize his utility? Show your calculations.

b) What is the minimum income Phil would need in London where prices for X and Y are $5 and$8 respectively to achieve the same utility as he would in D.C.?