1. Sally consumes two goods X and Y, her utility function is given by the equation U= 60XY2.The current market price for X is 200 birr, while the market price for y is 100birr and her current Income is 10,000birr A. Sketch a set of two Indifferent curves for Sally in her consumption of X and Y B. Write the expression for Sally's budget constraint graph the budget constraint and find the slope C. Determine the X, Y combination that maximize her utility given her budget constraint D. Calculate the Impact on Sally's optimum consumption of X and Y If the price of X increase to 300birr.
1. Sally consumes two goods X and Y, her utility function is given by the equation U= 60XY2.The current market price for X is 200 birr, while the market price for y is 100birr and her current Income is 10,000birr A. Sketch a set of two Indifferent curves for Sally in her consumption of X and Y B. Write the expression for Sally's budget constraint graph the budget constraint and find the slope C. Determine the X, Y combination that maximize her utility given her budget constraint D. Calculate the Impact on Sally's optimum consumption of X and Y If the price of X increase to 300birr.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. Sally consumes two goods X and Y, her utility function is given by the equation U= 60XY2.The current market price for X is 200 birr, while the market price for y is 100birr and her current Income is 10,000birr
A. Sketch a set of two Indifferent
B. Write the expression for Sally's budget constraint graph the budget constraint and find the slope
C. Determine the X, Y combination that maximize her utility given her budget constraint
D. Calculate the Impact on Sally's optimum consumption of X and Y If the price of X increase to 300birr.
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