Business, 04.10.2020 14:01 nicollexo21

Tim spends his income on donuts (D) and coffee (C). Coffee is $2 per cup and donuts are $1 each. Assume that Tim has $10 to spend, and his utility function is given by (D, C)=D0.5C0.5 . For this utility function, D=0.5D−0.5C0.5 and C=0.5D0.5C−0.5 . a. Calculate the optimal number of donuts and coffee for Tim to purchase. Assume that he can purchase partial donuts or cups of coffee. Round answers to two places after the decimal where necessary.

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Tim spends his income on donuts (D) and coffee (C). Coffee is $2 per cup and donuts are $1 each. Ass...

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