Question #239787

an indivdual consumes porduct x and y and spent 500 birr per time period. the prices of the two goods are 60 birr per unit for x and 40 birr per unit for y. the consumers in this case has a utility function expressed as U(x,y)=10xy. A) express the budget equation mathematically


1
Expert's answer
2021-09-20T16:39:44-0400
60x+40y=50060x+40y=500

MUx=10yMU_x=10y

MUy=10xMU_y=10x

10y60=10x40\frac{10y}{60}=\frac{10x}{40}

x=4x=4

y=6y=6


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