Log in
Economics
1
answer
0
watching
86
views

 An agents utility function is U(X,Y)= 2X+Y. The price of X is $5 and the price of Y is $2. The agent's total income is $100. What is the optimal bundle that maximizes utility?

Watch
1
answer
0
watching
86
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Richa Arora
Richa AroraLv10
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Suppose that Claudia has a utility funciton for two goods X and Y, is U(X,Y) = 10X + 10Y. If the Price of X is $2 per unit and the Price of Y is $5 per unit, what is Claudia's optimal bundle of goods? What is her utility at this optimal level? If the Price of X is $4 per unit and the Price of Y is $3 per unit, what is Claudia's optimal bundle of goods? What is her utility at this optimal level? Total Income is Unknown

Suppose that there are two goods (X and Y). The price of X is $2 per unitu, and the price of Y is $1 per unit. There are two consumers ( A and B). The utility functions for the consumers are: for consumer A: U (X,Y)= X^.5Y^.5 and for consumer B: U(X,Y)=X^.8Y^.2

Consumer A has an income of $100, and Consumer B has an income of $300.

1. Derive the marginal utlities of goods X and Y for consumer A


2. Derive the marginal utilities of goods X and Y for consumer B


3. Set consumer A's MRS equal to the price ratio. Then use the budget constraint to solve for her optimal bundle


4. Set consumer B's MRS equal to the price ratio. Then use the budget contraint to solve for his optimal consumption bundle.


5. Calculate the MRS for each consumer at their optimal consumption bundles.


6. Suppose that there is another conusmer (let's call her C). You don't know anything about her utility function or her income. All you know is that she consumes both goods. What do you know about C's MRS at her optimal consumption bundle? Why?


A consumer with the utility function U(X, Y) = [X – 10] Y^(1/2) with an income of $100 to spend on good X (with price $1) and good Y (with price $15).

1 Express this consumer’s utility maximization problem, using the particulars of this problem.

2 Give two conditions that the consumer’s optimal bundle will satisfy, again using the particulars of this problem.

3 Find the two conditions for the consumer’s optimal bundle. Neatly show your work.

4 Find the demand function for good X for a consumer with the given utility function. In other words, resolve this problem only now leaving the prices and income as variables: pX, pY, and m. Neatly show your work.

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in