How much utility does your professor receive

Reference no: EM132200389

Question: While visitng family in Mexico, your professor has a budget of $287 ($ = pesos) that he spends on tacos and tequila. The price of tacos if $6 and a shot of tequila is priced at $7. During his visit the price of tacos changes to $4. Assume your professor has a Cobb-Douglas utility function with (tacos) parameter α = (32/100). How much utility does your professor's receive from his optimal consumption bundle after the price change? (Assume both goods are commodities.)

Reference no: EM132200389

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