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Max has utility function U = xy, with marginal utility MUx = y and MUy = x. His budget constraint can be written pxx + pyy = I. What is Max's demand curve for x?

a) pxx = pyy

b) x = I/2px

c) xpx = ypy

2007-10-11 09:39:10 · 1 answers · asked by Anonymous in Social Science Economics

1 answers

MUy/MUx = py/px=x/y so the answer is c) that is he will spend equal amounts on x and y. But what does a) mean. do you have a typo???

2007-10-11 14:35:33 · answer #1 · answered by meg 7 · 0 0

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