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Mathew has the utility function U =vXY (where Y represents apples and X represents hot dogs), income of $20, and is deciding how to allocate that income between apples ($1) and hot dogs ($1).

Mathew's utility function implies that the marginal utility of apples is 0.5vX/Y and the marginal utility of hotdogs is 0.5vY/X. How many apples and hotdogs will Mathew buy?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M9402132
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