The marginal rate of substitution of Good X for Good Y is MRSXY(x,y)= 9y/x. The price of Good X is PX, the price of Y is PY, and Jane’s income is I. Notice that diminishing MRS is satisfied and preference is smooth. What is the function of the consumer’s demand curve of Good X if income I=100 and price of Good Y is PY=0.2?
The marginal rate of substitution of Good X for Good Y is MRSXY(x,y)= 9y/x. The price of Good X is PX, the price of Y is PY, and Jane’s income is I. Notice that diminishing MRS is satisfied and preference is smooth. What is the function of the consumer’s demand curve of Good X if income I=100 and price of Good Y is PY=0.2?
Chapter7: Consumer Choice: Maximizing Utility And Behavioral Economics
Section: Chapter Questions
Problem 6QP
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The marginal rate of substitution of Good X for Good Y is MRSXY(x,y)= 9y/x. The price of Good X is PX, the price of Y is PY, and Jane’s income is I. Notice that diminishing MRS is satisfied and preference is smooth. What is the function of the consumer’s demand curve of Good X if income I=100 and price of Good Y is PY=0.2?
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