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(Solved): 2. Suppose that your utility function over health care(h) and other goods (c) is given by U(h, c) an ...



2. Suppose that your utility function over health care(h) and other goods (c) is given by U(h, c) and that you have a fixed income of $100. (Assume that the indifference curves of your utility function bear the usual convex shape). Each year, you choose h and c to maximize your utility subject to a budget constraint: phh + pcc = Y where, ph is the price of health care, pc is the price of other goods, and Y is your income.



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