The Cobb-Douglas utility function gives a simple indifference map:
A budget curve gives the set of possible consumption choices with a given income. If you have an income of $196 and the price of good X is given by
A utility maximizing combination of goods X and Y occurs when the budget line is tangent to an indifference curve.
Find X as a function of its price, where (If Y represents all other goods, than this function is just a demand curve for X).
(Use px for
(you will lose 25% of your points if you do)
You can earn partial credit on this problem.