Utility Function

A utility function measures a consumer's utility after consuming a combination of products.

Example

Alice loves chocolate (X) and strawberries (Y). Her utility is

$$u \left( X, Y \right) = X \times Y$$

If Alice has 2 chocolates and 1 strawberry, she gets utility

$$u \left( 2, 1 \right) = 2 \times 1 = 2$$

Question

Alice loves chocolate (X) and strawberries (Y).

Her utility function is `u (X, Y) = X^3Y`.

What is her utility for 8 chocolate and 3 strawberries?

For 8 chocolate and 3 strawberries, Alice's utility is

$$ u \left( 8, 3 \right) = 8^3\times3 = 1536 $$