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21. Suppose that the price of Good X is $4, the price of Good Y is $20, and that if Mary spends all her money
21. Suppose that the price of Good X is $4, the price of Good Y is $20, and that if Mary spends all her money buying X, she can buy 100 units of X. Mary consumes both X and Y in equilibrium. (a) What is Mary's income? (b) What is the equation for Mary's budget line? (c) What will be Mary's MRSxy at her optimal consumption bundle? 22. Amy's utility function for two goods is U(X, Y) - X + Y. Suppose that Py = 1, and Amy's income is 20. (a) If Px - 0.5, what would be Amy's optimal consumption choice? (b) If Px - 2, what is the highest possible utility that Amy can obtain
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