Suppose an individual had a utility function given by: U=X^2*Y. Suppose that Bundle A contains 16...

Question

Question

Suppose an individual had a utility function given by: U=X^2*Y.

Suppose that Bundle A contains 16 units of Good X and 16 units of Good Y.

Bundle B contains 25 units of Good Y and an unknown quantity of Good X.

Calculate the amount of Good X that would make the individual indifferent between Bundle A and Bundle B.

(Round to the nearest three decimal places if necessary.)

Answer 1

Answer #1

For a consumer to be indifferent between 2 bundles,their MRS must be same.

Thus X=25

Answer 2

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