(Answered) 1 suppose we have the following utility function uxy

Management Studies

1) Suppose we have the following utility function: U(x,y)= x^.1 y^.9.

a. What is the marginal utility of x? What is the marginal utility of y? What is the marginal rate of substitution?

b. Suppose you have $200 to spend and the price of x is $1, and the price of y is $2. Draw the budget constraint.

c) Using the budget constraint from part c, calculate the optimal level of x and y and show it on the budget constraint. Draw the indifference curve and budget.

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Business Management, Management Studies

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