Question

1.Suppose a consumer had a utility function given by: U= 9X + 2Y. If the price of Good X (Px) is $8 and the price of Good Y is $4then what is the utility maximizing quantity of Good X the consumer will purchase with a budget of $32?

2. Suppose an individual had a utility function given by: U=X^4Y^0.6

Calculate this individual's Marginal Rate of Substitution (MRSxy) when they have a bundle with 3 units of Good X and 1.8 units of Good Y.

(Round to the nearest decimal place if necessary.)

3. Suppose a consumer had a utility function given by: U=X^0.5Y^0.2. If the price of Good X (Px) is $10 and the price of Good Y is $2 then what is the utility maximizing quantity of Good Y the consumer will purchase with a budget of $98

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

Answer 1