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28 Sep 2019
Exercise 3.
Robinson is the only person in an island, and has an endowment of80 units of X and 140 units of Y. His utility function is:
U = ln(X) + ln(Y)
a) Find the marginal utility of X and Y
b) Find the marginal rate of substitution when Robinson consumesall his endowment
c) Suppose now that Robinson finds that he is not alone on theIsland, so now he can trade
goods with other people. Find the relative prices PX/PY for whichRobinson decides to
sell X and to buy Y.
Exercise 3.
Robinson is the only person in an island, and has an endowment of80 units of X and 140 units of Y. His utility function is:
U = ln(X) + ln(Y)
a) Find the marginal utility of X and Y
b) Find the marginal rate of substitution when Robinson consumesall his endowment
c) Suppose now that Robinson finds that he is not alone on theIsland, so now he can trade
goods with other people. Find the relative prices PX/PY for whichRobinson decides to
sell X and to buy Y.
Robinson is the only person in an island, and has an endowment of80 units of X and 140 units of Y. His utility function is:
U = ln(X) + ln(Y)
a) Find the marginal utility of X and Y
b) Find the marginal rate of substitution when Robinson consumesall his endowment
c) Suppose now that Robinson finds that he is not alone on theIsland, so now he can trade
goods with other people. Find the relative prices PX/PY for whichRobinson decides to
sell X and to buy Y.
Prachi DabasLv10
28 Sep 2019