1. Joseph's utility is given by: U=X² + y² (Note that this is the equation of a circle with the center at the origin). The marginal utilities are MUX-2X and MUy=2Y. Assume that Px=10, Py=20 and m=200. Find the optimal amounts of X and Y. Show your answer on a graph.
1. Joseph's utility is given by: U=X² + y² (Note that this is the equation of a circle with the center at the origin). The marginal utilities are MUX-2X and MUy=2Y. Assume that Px=10, Py=20 and m=200. Find the optimal amounts of X and Y. Show your answer on a graph.
Chapter10: Consumer Choice Theory
Section: Chapter Questions
Problem 2P
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