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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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 Fall '10
 MacroWilliams,MicroYoshi
 Economics, Utility, Intermediate Microeconomic Analysis, Yoichi Otsubo

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