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Suppose that a consumer's utility is given by a (x, y) =4x 2 4 4 2 . in which case the marginal utilities will be
Suppose that a consumer's utility is given by a (x, y) =4x 2 4 4 2 . in which case the marginal utilities will be given by MU = and MU = respectively. Given arbitrary prices for good x. good y. and income ( P . P . and /, respectively). solve for the consumer's demand for good x. That is, your final equation should have the optimal value of x on the left hand side, and some combination of P , ) , and / on the right hand side. I . P 25 ( P) ; or, simplified ; x= PP + 25 ( P.)2 P P O I . P : or, simplified, x=- PP + ( P ) 2 P + . P O I . P or, simplified , x= (Py ) PP + ( P, ) 2 P P
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