ECO - Graph the budget line
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Consider a consumer with utility u(x, y) = √xy . The consumer has $100 to spend, and the price of X is $5 and the price of Y is $2.
(1) Graph the budget line.
(2) Find the point that maximizes the consumers utility given the budget. Draw the indifference curve through this point.
(3) What are the expenditure shares?
12 years ago
ECO - Graph the budget line Solution
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