Joan’s utility depends on two commodities: her view of the sea and wine. Her utility function is :
U = 24x – 6x2+ 4y
where x = hours of view “consumed” per day
y = wine.
The view is free, i.e. Px = 0. The price of wine Py = 5. Her available income is 10. Assume that Joan does not look at the view beyond the point where it bores her, i.e. when the marginal utility of the view is negative.