Question

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

Answer 1

$$60x+40y=500$$

$$MU_x=10y$$

$$MU_y=10x$$

$$\frac{10y}{60}=\frac{10x}{40}$$

$$x=4$$

$$y=6$$