Marcusrsquos utility function is ux y x 2 y 1 a write an, Ask an Expert

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Marcus’s utility function is U(X, Y) = (X + 2) (Y + 1). a. Write an equation for the indifference curve that goes through the point (2, 8). b. Graph the indifference curve for U=36 c. Let Px=Py=1 and m=11. Draw Marcus’s budget constraint in the graph from part (b). Can Marcus achieve a utility of 36? d. What is Marcus’s marginal rate of substitution at the bundle (X, Y)? HINT: and e. Set the value of the MRS equal to the price ratio (based on the prices given in part c). What equation do you get? f. What is the equation for the budget constraint (based on information in part C)? g. Solve these two equations for two unknowns (X and Y). What is Marcus’s optimal consumption of X? What is his optimal consumption of Y?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91710743

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