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> Nikki's utility function is the same as in problem 5: U(X, Y) = XY2 > Prices are Px = 4 and Py = 4. a. Write the budget equations for each of two possible levels of income. B;: M = 60 Y = B2: M = 120 Y = b. Find and simplify the tangency condition for an optimum. Y = c. For each budget equation, calculate optimal X*, Y*, and U*. Also calculate Nikki's weekly expenditure on each good. B:: M= 60 U* = PX* = PY* = X* =_ Y* = - B2: M = 120 PxX* = - PYY* = X* =- Y* = U* =

> Nikki's utility function is the same as in problem 5: U(X, Y) = XY2 > Prices are Px = 4 and Py = 4. a. Write the budget equations for each of two possible levels of income. B;: M = 60 Y = B2: M = 120 Y = b. Find and simplify the tangency condition for an optimum. Y = c. For each budget equation, calculate optimal X*, Y*, and U*. Also calculate Nikki's weekly expenditure on each good. B:: M= 60 U* = PX* = PY* = X* =_ Y* = - B2: M = 120 PxX* = - PYY* = X* =- Y* = U* =

Microeconomic Theory
Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter4: Utility Maximization And Choice
Section: Chapter Questions
Problem 4.11P
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Im not sure how to solve for part c in particular. Help with formulas may be super helpful
DROP OFF BU 21 6. DERIVING THE INCOME-CONSUMPTION AND ENGEL CURVES > Nikki's utility function is the same as in problem 5: U(X, Y) = XY² > Prices are Px = 4 and Py = 4. a. Write the budget equations for each of two possible levels of income. B:: M = 60 Y = B2: M = 120 Y = b. Find and simplify the tangency condition for an optimum. Y = c. For each budget equation, calculate optimal X*, Y*, and U*. Also calculate Nikki's weekly expenditure on each good. B1: M= 60 PxX* = PY* = X* = - Y* = U* = B2: M = 120 PY* = PxX* = X* = Y* = U* = . 's demand curve (D) for X. EDx = jon Curve
Transcribed Image Text:DROP OFF BU 21 6. DERIVING THE INCOME-CONSUMPTION AND ENGEL CURVES > Nikki's utility function is the same as in problem 5: U(X, Y) = XY² > Prices are Px = 4 and Py = 4. a. Write the budget equations for each of two possible levels of income. B:: M = 60 Y = B2: M = 120 Y = b. Find and simplify the tangency condition for an optimum. Y = c. For each budget equation, calculate optimal X*, Y*, and U*. Also calculate Nikki's weekly expenditure on each good. B1: M= 60 PxX* = PY* = X* = - Y* = U* = B2: M = 120 PY* = PxX* = X* = Y* = U* = . 's demand curve (D) for X. EDx = jon Curve
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