Question
Consider the following utility function: U = XY that earns 200 MT and spends on the consumption of goods X and Y, whose prices
Consider the following utility function: U = XY that earns 200 MT and spends on the consumption of goods X and Y, whose prices are, respectively: Px = 2 and Py = 1. a) Calculate the Marginal Rate of Substitution of good Y by X and say its meaning. b) What is the optimal basket? The utility achieved? c) Determine the marginal utility value of each asset at that point of equilibrium.
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Public Finance
Authors: John E. Anderson
2nd edition
978-0538478441, 538478446, 978-1133708360, 1133708366, 978-1111526986
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