Consider the consumer problem with two goods, apples and oranges. Let x be the amount of apples and y be the amount of oranges, and let u(x, y) = 2√x + y be the utility function of the consumer. Let på be the price of apples, py be price of oranges, and I be the income of the consumer. (a) Using the condition that the MRS is equal to the relative prices, that is, Px ди/дх ди/ду Py derive the demand functions of apples and oranges.
Consider the consumer problem with two goods, apples and oranges. Let x be the amount of apples and y be the amount of oranges, and let u(x, y) = 2√x + y be the utility function of the consumer. Let på be the price of apples, py be price of oranges, and I be the income of the consumer. (a) Using the condition that the MRS is equal to the relative prices, that is, Px ди/дх ди/ду Py derive the demand functions of apples and oranges.
Chapter6: Demand Relationships Among Goods
Section: Chapter Questions
Problem 6.9P
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