A low income household has a monthly income of 900, and is qualified to receive certain welfare from government in housing.
This household has the following utility function and faces the following market information:
$U = X.Y$ where $X$ is the housing consumption (sq.) while $Y$ represents all other goods; Price of $X$ (housing per square foot) is \$0.5, and price of $Y$ (all other goods) is normalized to be \$1. Hint: MRS = $Y/X$
- What will be the consumption bundle for this household when no subsides or welfare is offered? (hint: utility maximization given the budget constrain)