Show what happens to the individual demand curve

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A consumer’s marginal rate of substitution for two goods, X and Y, is given by (3QY)/(2QX). The consumer’s current income is 100, while the prices of X and Y are 10 and 4, respectively.

a. Determine the consumer’s utility maximizing (optimal) combination of QX and QY.

b. Graph the demand curve for QY. You may use prices for Y of 2, 4, 5, and 10 as a guide. (You can use these four points as a guide to get a reasonable approximation for the rest of the demand curve.)

c. Show what happens to the individual demand curve for QY if income increases to 150. (As before, you are only required to calculation the quantity demand for the prices 2, 4, 5, and 10. You can then impute a reasonable approximation of the rest of the demand curve from these four points.)

Reference no: EM13301684

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