What is his optimal consumption bundle

Assignment Help Business Economics

Reference no: EM131808104

Victor's utility function for goods X and Y is represented by U(X, Y ) = X0.2Y 0.8 . Assume his income is $100 and the prices of X and Y are $10 and $20, respectively.

a. Express his MRS of good Y for good X. As the amount of X relative to the amount of Y along the same IC, does the absolute value of the MRS increase or decrease? Explain.

b. What is his optimal consumption bundle?

c. How will this bundle change when all prices double and income is held constant?

d. Draw the demand curve for good X and the demand curve for good Y assuming income is $100.

Reference no: EM131808104

Questions Cloud

Discuss what is the total amount of unrealized gain-loss : what is the total amount of unrealized gain/loss and dividend revenue reported by Dumar Corporation

Purchase of government bonds from an individual : Using T-accounts show that the BoZ can increase the monetary base by (a) an open market purchase of government bonds from banks

What is the ending balance in the retained earnings account : The retained earnings account has a debit balance of $2,400, what is the ending balance in retained earnings account after all closing entries have been made

How would you have handled this situation if you were kazer : How would you have handled this situation if you were Monique Kazer and How would you have handled this situation if you were Hyun Cho

What is his optimal consumption bundle : What is his optimal consumption bundle? How will this bundle change when all prices double and income is held constant?

Utilize the internet to open bookkeeping organization : Expecting that the final product is an inadequate review report, diagram the essential duties of the review firm after it issues the report being referred

Differentiate between three component of healthcare system : Differentiate between two to three key components of a free market healthcare system and single payer government system.

Prepare the master budget for its first four months : Morganton Company makes one product and it provided the following information to help prepare the master budget for its first four months of operations.

What is pack net income using accrual accounting : Pack had the following transactions for 2006. Sales on account, $6,000. What's Pack's 2006 net income using accrual accounting

User Account

All Pages