(a)_Suppose we have preferences U(X, Y) = X² Y2.. What is the utility at the bundle X = 5 and Y = 20? Create a table then graph/sketch the indifference curve through (5, 20). Interpret the MRS (with MRS = Y/X) at this bundle. < (b)_Let prices be Px = $5, Py = $5 and income M = $1000. Draw/sketch the budget constraint. Explain what the slope of the budget line means in economic terms.< (c) State the consumer's utility maximization problem and express this in words. What are the two conditions (equations) that identify the optimum? Sketch this in a figure and explain.

(a)_Suppose we have preferences U(X, Y) = X² Y2.. What is the utility at the bundle X = 5 and Y = 20? Create a table then graph/sketch the indifference curve through (5, 20). Interpret the MRS (with MRS = Y/X) at this bundle. < (b)_Let prices be Px = $5, Py = $5 and income M = $1000. Draw/sketch the budget constraint. Explain what the slope of the budget line means in economic terms.< (c) State the consumer's utility maximization problem and express this in words. What are the two conditions (equations) that identify the optimum? Sketch this in a figure and explain.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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