Register
Jane has utility function � �, � = �E�W. The price of x is �., the price of y is �0, and Jane’s income is W. What is the expression of her consumption of x as a function of prices and income (her optimal
92.2k views
0 votes
Jane has utility function � �, � = �E�W. The price of x is �., the price of y is �0, and Jane’s income is W. What is the expression of her consumption of x as a function of prices and income (her optimal consumption is determined by the tangency rule)?

User Jim Hunziker
by
4.3k points

1 Answer

4 votes

Answer: The correct answer is: Qx(px,py,Y)= 4Y/9px.

Step-by-step explanation:

MUX/MUY = PX/PY

4y/5x = Px/Py

Py = Px * 5x/4y

Also budget line gives us x.Px + y.Py = Y

x = 4Y/9px.

User Hamza Khurshid
by
4.7k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

5.2m questions

6.7m answers

Other Questions

Misk Co. purchased the following securities during 20X7 to be classified as held-to-maturity securities, trading securities, or available-for-sale securities: I. Debt securities bought and held for the
Which of the following should be considered last when searching for financing? Family members Banks Commercial finance companies Credit cards I'm guessing it's C but idk
Explain the similarities and differences between how both producers and consumer use money
Donna's philosophy as she coordinates the marketing efforts is to keep in mind the company's overarching strategy, and to ensure that all marketing activities send a consistent message, beginning with
Brett buys a new cell phone for​ $100. he receives consumer surplus of​ $80 from the purchase. how much does brett value his cell​ phone?
Link Copied!