Compute marys utility maximizing consumption bundle

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Reference no: EM13740022

Suppose Mary’s utility function for two goods X and Y is given by: U(X,Y) = 2X1/3 Y2/3

a) If Px = $4, Py = $5, and Income I = $200, compute Mary’s utility maximizing consumption bundle. Show the utility maximizing consumption bundle on a graph.

b) Suppose Px and Py are the same as in part (a), but Mary’s income falls to $150. Construct Mary’s Income Consumption Curve, and show Mary’s Engel Curve for Good X.

c) Suppose Py and Income are the same as in part (a), but Px falls to $2. On a graph, construct Mary’s demand curve for good X.

Reference no: EM13740022

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