Step 1 :\(U = 200X^{0.8}Y^{0.2}\)
Step 2 :\(500 = 20X + 10Y\)
Step 3 :\(50 = 2X + Y\)
Step 4 :\(Y = 50 - 2X\)
Step 5 :Substitute \(Y\) into the utility function:
Step 6 :\(U = 200X^{0.8}(50 - 2X)^{0.2}\)
Step 7 :To maximize \(U\), we can use the given options for \(X\) and \(Y\) and find the one that gives the highest utility:
Step 8 :a. \(U = 200(25)^{0.8}(0)^{0.2} = 0\)
Step 9 :b. \(U = 200(10)^{0.8}(20)^{0.2} = 2000\)
Step 10 :c. \(U = 200(12.5)^{0.8}(25)^{0.2} = 2500\)
Step 11 :d. \(U = 200(15)^{0.8}(15)^{0.2} = 2250\)
Step 12 :e. \(U = 200(20)^{0.8}(10)^{0.2} = 2000\)
Step 13 :\(\boxed{\text{c. } X=12.5 \text{ e } Y=25}\)