Answer to Question #99942 in Microeconomics for Foster Kumi

Question

Johnson's utility function for good X and Y is given by U(X,Y)=X²Y³. Px, Py and I are the price of good X, price of good Y consumer income respectively.
a) write the budget contraint of the consumer
b) derive the demand function for good X and Y
c) What combination of X and Y maximizes the consumer's utility at l=100, Px=2 and Py= 3?
d) Calculate the marginal rate of substitution between X and Y at equilibrium and interpret your results.

Answer 1

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