In: Economics
Two goods are given, where x1 and x2 are the number of units of these goods. The preference structure of a consumer is given by the following (ordinal) utility function:
u (x1, x2) = x1 * x2
The indifference curves show a strictly convex course to the origin. The prices of the goods are given by p1 and p2. The consumer wants to achieve the level of utility ū with minimal expenditure.