Homework Answers
A.If Jane spends all her income on X,she can buy 80 units of X
Price of X(Px)=100
Income=100*80=8000
B.Price of Y(Py)=Income/40
Price of Y=8000/40=200
Equation of budegt line:
Px*X+Py*Y=M
Where M=income.
C.slope of budget line=-Px/Py
Slope=-100/200=-1/2
D.Price of Y=200
E.MRS=-MUx/MUy
MUx is marginal utility of good X
MUy is marginal utility of good Y
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