You can solve graphically or using equations. Marta has a monthly income of $600. Marta can only
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Question:
You can solve graphically or using equations.
Marta has a monthly income of $600. Marta can only buy two goods: Health Care (X1) and Other goods (X2).
Marta's Utility Function = X1 * 3X2
How much should Marta spend on health care? How much should Marta spend on other goods?
- Show Marta's budget constraint on a graph
- Show 3 utility functions on the same graph: $400, $600 and $800
- What is Marta's Utility at each of these utility functions?
- How much does Marta spend on health care? How much does she spend on other goods at her income of $600?
Related Book For
Focus on Personal Finance
ISBN: 978-0077861742
5th edition
Authors: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart
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