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Unformatted text preview: marginal utility for y = 1, y = 4, y = 5? Sketch the marginal utility. ( ) x x x = 1 use may You Ans. ( ) y MU y 2 2 = (Graph will be shown in class) Spring 2010 Econ 320 Intermediate Microeconomic Analysis Yoichi Otsubo - 2 -5. Suppose David purchases only Pepsi and Pizza. Let x be the number of units of Pepsi, and y be the units of Pizza he purchases per month. Also suppose that his utility function is measured by xy U = , and his monthly income is I . Each unit of Pepsi costs P x and each unit of Pizza costs P y . Write a statement of the constrained optimization problem. Which variables are exogenous? Which variables are endogenous? Ans. I y P x P xy y x y x ≤ + : subject to max ) , ( Exogenous variables: I, P x , P y . Endogenous variables: x, y....
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This note was uploaded on 02/29/2012 for the course 320 322 taught by Professor Macro-williams,micro-yoshi during the Fall '10 term at Rutgers.
- Fall '10