Todd has the following utility function:
U(X,Y) = X * Y
Prices and Income are Px = 5, Py = 4 and I = $200.
a) Find Todd's optimal consumption bundle and utility level at that price level, using the Lagrangian multiplier method.
b) Assume the government decides to impose a tax of $5 per unit of x (so that the new price of good x is $10). What is the new optimal bundle and the new level of utility?