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Given utility function U= X1/2Y1/2 where PX = 12 Birr, Birr, PY = 4 Birr and the income of the consumer is, M= 240 Birr.
- Given utility function U= X1/2Y1/2 where PX = 12 Birr, Birr, PY = 4 Birr and the income of the consumer is, M= 240 Birr.
A. Find the utility maximizing combinations of X and Y.
B. Calculate marginal rate of substitution of X for Y (MRSX, Y) at equilibrium and interpret your result.
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The Economics Of Inequality
Authors: Thomas Piketty, Arthur Goldhammer
1st Edition
0674504801, 9780674504806
