Business, 09.05.2021 02:00 angelteddy033
Justin has the utility function U = xy, with the marginal utilities MUx = y and MUy = x. The price of x is $2, the price of y is py, and his income is 40. When he maximizes utility subject to his budget constraint, he purchases 5 units of y.
(a) What must be the price of y and the amount of x consumed? (1 marks).
(b) Prove that this allocation follows the equi-marginal principle (2 marks).
(c) What would be the new bundles of x, y if Px was $3 (2 marks).
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Justin has the utility function U = xy, with the marginal utilities MUx = y and MUy = x. The price o...
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