Consider a representative consumer in a two goods economy of x and y. The price of good x is 1 TL and the price of y is 3 TL. This consumer is spending all his income at the basket he is currently consuming, and his marginal rate of substitution (MRS) of x for y is 2. Is he at an optimum? If so, show why. If not, explain how he can achieve an optimum point in order to maximize his utility?
Consider a representative consumer in a two goods economy of x and y. The price of good x is 1 TL and the price of y is 3 TL. This consumer is spending all his income at the basket he is currently consuming, and his marginal rate of substitution (MRS) of x for y is 2. Is he at an optimum? If so, show why. If not, explain how he can achieve an optimum point in order to maximize his utility?
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 25SQ
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- Consider a representative consumer in a two goods economy of x and y. The price of good x is 1 TL and the price of y is 3 TL. This consumer is spending all his income at the basket he is currently consuming, and his marginal rate of substitution (MRS) of x for y is 2. Is he at an optimum? If so, show why. If not, explain how he can achieve an optimum point in order to maximize his utility?
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