Mary's preferences over X and Y correspond to the following utility function: U(X,Y) = XY³. Suppose that her income is M=$80 and that the market price of X is Px=$2, while that of Y is Py=$4 a. Find and plot her budget line, clearly indicating the intercepts and the slope. b. The marginal utility of X is MUx=Y³, while that of is MUy=3XY?. Compute and show Mary's optima consumption bundle on the same graph. c. Find her utility at her optimal consumption bundl specifying the amount of satisfaction she derives from the Tast unit of each good purchased.

Mary's preferences over X and Y correspond to the following utility function: U(X,Y) = XY³. Suppose that her income is M=$80 and that the market price of X is Px=$2, while that of Y is Py=$4 a. Find and plot her budget line, clearly indicating the intercepts and the slope. b. The marginal utility of X is MUx=Y³, while that of is MUy=3XY?. Compute and show Mary's optima consumption bundle on the same graph. c. Find her utility at her optimal consumption bundl specifying the amount of satisfaction she derives from the Tast unit of each good purchased.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 3SQP

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