With utility function of U(X, Y ) = 10X2Y (1) and with income of RM90 and spending
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With utility function of U(X, Y ) = 10X2Y (1) and with income of RM90 and spending it on both X and Y a) Let the price of X is RM10 and Y is RM5, what will be the optimal consumption bundle? Draw a diagram consisting of the budget line, indifference curve together with optimal bundle (label the point as A) in the diagram of the scenario. b) Let say the price of Y double, now become RM10. What will be the new optimal bundle. Using the same diagram in a), incorporate this new changes and label B as the new optimal bundle.
Related Book For
Probability & Statistics for Engineers & Scientists
ISBN: 978-0130415295
7th Edition
Authors: Ronald E. Walpole, Raymond H. Myers, Sharon L. Myers, Keying
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