Mr. J enjoys goods x and y according to the utility function
U(x, y) =3x2y
the price of good y is $4, the price of good x is $4, and he has $120 to spend.
1. Write down and illustrate Mr. J's budget line.
2. Write down the budget exhaustion condition of Mr. J's optimization problem.
3. Write down the rationality condition of Mr. J's optimization problem.
4. Given the two conditions from (2) and (3), determine the optimal bundle (x*, y*) that Mr. J will choose in order to maximize his utility.