consume two goods, What is Min Income required to generate TU=2000 given Tu=10xy Py= 20 ....
consume two goods, What is Min Income required to generate TU=2000 given Tu=10xy
Py= 20 .
Px= 10
Homework Answers
The minimization function would be
L = 10x + 20y +β(2000-10xy)
FOC:
X : 10-10βy=0 (1)
Y: 20-10βx =0 (2)
β: 2000- 10xy=0 (3)
From (1) and (2)
Y/x = 1/2
X= 2y
Putting in (3)
10.(2y).y =2000
y= 10
x = 20
The minimum income will be 10x +20y = 10(20)+20(10)= 400
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consume two goods, What is Min Income required to generate
TU=2000 given Tu=10xy
Py= 20 ....
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