one managerial economic utility function question: one managerial economic utility function question Amy consumes two goods X and Y, and her utility function is: U(X,Y)=2XY^2 Suppose the price of X=$10 and the price of Y = $15. Amy’s income is $500. a) Write an expression for Amy’s indifference curve when her utility level gets to 40. b) Calculate the consumption of X when Y=4. c) Determine the X, Y combination that maximizes Amy’s utility, given her budget constraint. d) Determine the marginal rate of substitution (MRS) between the two goods at the point of maximization? e) Suppose the price of X is changed to $15. Calculate the impact on Amy’s optimal choice. How does her utility change?
Posted on: Sun, 14 Dec 2014 07:24:51 +0000
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