1
answer
0
watching
79
views
8 Apr 2020
Quantity
Tx
Ty
1
80
100
2
150
180
3
210
240
4
260
280
5
300
310
6
330
330
7
350
340
1. If Px= $10, and Py= $20, and consumer's income = $120, find the optimal combination of good X and good Y that will maximize the consumer’s utility.
2. What is the total utility of that combination?
3. If the consumer’s income increases to $150, and prices of goods X and Y are unchanged: a. Find the new optimal quantity of good X and good Y that will maximize the consumer’s utility. b. Calculate the income elasticity of demand for good X, and for good Y, for an income increase from $120 to $150. What can you conclude?
Quantity | Tx | Ty |
1 | 80 | 100 |
2 | 150 | 180 |
3 | 210 | 240 |
4 | 260 | 280 |
5 | 300 | 310 |
6 | 330 | 330 |
7 | 350 | 340 |
1. If Px= $10, and Py= $20, and consumer's income = $120, find the optimal combination of good X and good Y that will maximize the consumer’s utility.
2. What is the total utility of that combination?
3. If the consumer’s income increases to $150, and prices of goods X and Y are unchanged: a. Find the new optimal quantity of good X and good Y that will maximize the consumer’s utility. b. Calculate the income elasticity of demand for good X, and for good Y, for an income increase from $120 to $150. What can you conclude?
Read by 1 person
erinhare45Lv2
2 Jun 2021