1
answer
0
watching
130
views
28 Sep 2019
Antonio has strictly convex preferences. He is considering buying a bundle A with positive amounts of good X and good Y. Bundle A costs all of his income and the prices are Px=1 and Py=2. At bundle A his MRS=-3/4.
a. If you were to offer advice to Antonio would you tell him to buy more x and sell back some y or buy more y and sell back more x or to do nothing since he is already maximizing his utility. Explain.
Antonio has strictly convex preferences. He is considering buying a bundle A with positive amounts of good X and good Y. Bundle A costs all of his income and the prices are Px=1 and Py=2. At bundle A his MRS=-3/4.
a. If you were to offer advice to Antonio would you tell him to buy more x and sell back some y or buy more y and sell back more x or to do nothing since he is already maximizing his utility. Explain.
Namita kumariLv6
28 Sep 2019