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Economics easy question.

This question was answered on Jan 30, 2013. View the Answer
Economics easy question.
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Hi I missed Q5 by mistake.... View the full answer

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Q1
MRS= MU of x/MU of y = 3y/x
Price ratio = 5/2=2.5
So in equilibrium 3y/x=2.5
2.5x = 3y or 5x= 6y
Budget line is 5x+2y =20
6y+2y = 20
Y=20/8 = 2.5
X= 3*2.5/2.5= 3
Q2
a.
MRS= (y+1)/x
Price ratio =...

This question was asked on Jan 28, 2013 and answered on Jan 30, 2013.

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