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:
a At the utilitymaximizing point Kim will choose twice as much of goo...View the full answer
Answered By
Divya Munir
I hold M.Sc and M.Phil degrees in mathematics from CCS University, India and also have a MS degree in information management from Asian institute of technology, Bangkok, Thailand. I have worked at a international school in Bangkok as a IT teacher. Presently, I am working from home as a online Math/Statistics tutor. I have more than 10 years of online tutoring experience. My students have always excelled in their studies.
0 Reviews
10+ Question Solved
Related Book For 
Microeconomics
ISBN: 978-1464187025
2nd edition
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
Question Posted:
