What is slope of budget constraint-Find the optimal X and Y

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Reference no: EM13860666

Gene has the following utility function: U = XY + 2Y, the Px = $4, the Py = $1 and I=$6.

a. Find Gene’s MRSx,y

b. Is the MRSx,y increasing, decreasing, or constant with respect to X?

c. What is the slope of the budget constraint?

d. Find the optimal X and Y.

e. At the optimal X* and Y* calculate and interpret the MUx/Px & MUy/Py.

Reference no: EM13860666

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