Derive the jabobs budget constraint equation

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If Jacob receives by consuming ice-cream cone (X) and hamburger (Y) at Burger King is represented by the utility function U(X;Y) = XY. In addition, the per-unit prices of ice-cream cone and hamburger are $1 and $3 respectively. Jacob has an income of $24 to spend on the two goods.

Derive Jabob's budget constraint equation.

What is the slope of the budget line?

Derive the marginal utility of good X (MUX) using partial differentiation

Derive the marginal utility of good Y (MUY) using partial differentiation.

Using the equlibrium condition -MUX/MUY = -PX/PY to derive the quantity of each good consumed at the utility-maximizing equilibrium.

What is the utility level?

If income now doubles, while there is no change to the per-unit price of the two goods, derive the quantity of each good consumed as well as the utility level at the new equilibrium. What type of goods are X and Y?

Reference no: EM13238492

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