Given the following Cobb Douglas Utility function u(x1, x2) = x1cx2d.What is Marginal Rate of Substitution MRS x1, x2 ?
The consumer faces the budget line P1X1 + P2X2= M where P1 and P2 are price for good 1 and 2 and X1and X2 are quantity demanded for good 1 and good 2 respectively , M is consumer income. If the price of good 1 doubles, the price of good 2 becomes 5 times larger, and income becomes 3 times larger, write down an equation for the new budget line in terms of the original prices and income
Suppose the demand equation for good Y is given as Q = 50–5P where Q is the quantity demanded and P is the price. What price would the monopolist set if he had 50 units? How many would he sell? What price would he set if he had 100units? How many would he sell?
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