5. Janice consumes two goods, X and Y. Janice has a utility function given by the expression: U=4X0sY®s and current prices of X and Y are $25 and $50, respectively. Janice currently has an income of 750 unit per time period. a. Write an expression for Janice's budget constraint. b. Calculate the marginal rate of substitution of X for Y. (horizontal line X, vertical line Y). c. Calculate the values of X and Y that will maximize utility. d. Graph your answers (budget line, indifference curve)
5. Janice consumes two goods, X and Y. Janice has a utility function given by the expression: U=4X0sY®s and current prices of X and Y are $25 and $50, respectively. Janice currently has an income of 750 unit per time period. a. Write an expression for Janice's budget constraint. b. Calculate the marginal rate of substitution of X for Y. (horizontal line X, vertical line Y). c. Calculate the values of X and Y that will maximize utility. d. Graph your answers (budget line, indifference curve)
Chapter4: Utility Maximization And Choice
Section: Chapter Questions
Problem 4.8P
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