Ambrose’s utility is U(x lowercase 1, x lowercase 2= 4x^1/2 lowercase 1 + x lowercase 2

| November 24, 2016

Ambrose’s utility is U(x lowercase 1, x lowercase 2= 4x^1/2 lowercase 1 + x lowercase 2. If the price of nuts (good 1) is $1, the price of berries (good 2) is $7, and his income is $238, how many units of nuts will Ambrose choose?

Answer is 196.

Please show me how this was arrived at?

Thanks!

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