Question
1.Consider a consumer consuming two goods, faces the following utility function: U(X,Y)= 30X^(4/5) Y^(1/5) Assume further that price of is Birr 5 per unit, price
1.Consider a consumer consuming two goods, faces the following utility function:
U(X,Y)= 30X^(4/5) Y^(1/5)
Assume further that price of is Birr 5 per unit, price ofis Birr 10 per unit and income of the consumer is Birr 2,000.Based on the above information, attempt the following questions.
a.Find the optimum combination of and which maximizes the utility
b.Calculate MRSxy at optimal combination?
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Using Excel For Principles Of Econometrics
Authors: R Carter Hill, Genevieve Briand
4th Edition
1118032101, 9781118032107
