you have a budget of $52 to spend of pretzels and beer.utility function is U = 15p + 18b – 0.5p2 – 0.5b2.price of small bag of pretzels is $2, and price of pint of beer is $4.
Using calculus, set up a constrained optimization problem using the Lagrangian multiplier that derives the optimal consumption of pretzels and beer. Find the optimal values.
At the optimum, what are the marginal utilities of both pizza and beer? Does the Utility-Maximizing Rule hold? i.e. MUp/Pp= MUB/PB.
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