PS2(3)(a) Given: Consumer's Utility Function ? U= 4qx * * qy qx = Quantity Demanded for Goodx qy = Quantity Demanded for Goody Marginal Rate of Substitution ? MRS = qy/qx Consumer's Current Income? I = 60 Price of Goodx? px= 10 Price of Goody? Py = 5 Questions: * What is the Consumer's Utility Maximizing Combination of Goodx & Goody & Why? What is qx at px= 15?

PS2(3)(a) Given: Consumer's Utility Function ? U= 4qx * * qy qx = Quantity Demanded for Goodx qy = Quantity Demanded for Goody Marginal Rate of Substitution ? MRS = qy/qx Consumer's Current Income? I = 60 Price of Goodx? px= 10 Price of Goody? Py = 5 Questions: * What is the Consumer's Utility Maximizing Combination of Goodx & Goody & Why? What is qx at px= 15?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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PS2(3)(a)
Given:
Consumer's Utility Function ? U = 4qx * qy
qx = Quantity Demanded for Goodx
qy = Quantity Demanded for Goody
Marginal Rate of Substitution ? MRS = qy/qx
Consumer's Current Income? I = 60
Price of Goodx? px= 10
Price of Goody? Py=5
Questions:
* What is the Consumer's Utility Maximizing Combination of Good & Goody &
Why?
* What is qx at px= 15?

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