Question: Suppose that a consumer s utility function is U x y xy

Suppose that a consumer's utility function is U(x,y)= xy + 10y. The marginal utilities for this utility function are MUx= y and MUy = x+10. The price of good x is Px and the price of good y is Py, with both prices positive. The consumer has income I. 
Suppose now that income is $100, I=100. Since the amount of good x can never be negative, what is the maximum value of Px for which the consumer could ever purchase ever purchase any of good x? 

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  • CreatedAugust 05, 2013
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