Problem set 3 - If then, U= 2(10)(10)+1=201 2. Now MRS= y...

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Problem Set 3 Problem 1 Problem 2
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Problem 3 (p81) MRS=2y/2x=y/x=1 =>y=x =>y-x=0(maximizing utility) (1) And budget equation: x+y=20 (2) From (1)+(2) X=10 and y=10
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Unformatted text preview: If then, U= 2(10)(10)+1=201 2. Now MRS= y /x= px /py =2 /1 So y-2x = 0 And budget equation is :2x+y=20 Solve: get x=10; y=5...
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Problem set 3 - If then, U= 2(10)(10)+1=201 2. Now MRS= y...

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