Kim's utility function is given by U = XY. For this utility function, MUx = Y and
Question:
a. If good X costs $6 and good Y costs $3, what share of Kim's utility-maximizing bundle is made up of good X? Of good Y?
b. If the price of good Y rises to $4, what happens to the shares of X and Y in Kim's utility-maximizing bundle?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Microeconomics
ISBN: 978-1464187025
2nd edition
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
Question Posted: