Hi,

I was wondering if you could help me for these two questions. They were on the exercice sheet I was given to study for my exam and I do not understand them at all. Thank you very much!

Suppose the price of good x is $5 and the price of good y is $7. Also, suppose MU x y and MU y x . Which of the following baskets could be an interior optimum?

1. x = 5, y = 7
2. x = 4, y = 6
3. x = 7, y = 5
4. x = 6, y = 4

Suppose that U(x,y) = min(3x,y). Further suppose that Px = $5 per unit and Py = $10 per unit and income is I = $105. For this consumer, the optimal basket to buy would be

1. (x,y) = (9,3)
2. (x,y) = (3,1)
3. (x,y) = (1,3)
4. (x,y) = (3,9)