Answer to Question #102432 in Microeconomics for Daud petro

Question #102432
Y=X^1/5Z^4/5.what is expansion path equation?
1
Expert's answer
2020-02-07T10:02:52-0500

If Y=X^1/5Z^4/5, then expansion path equation is:

"\\frac{MPx}{MPz} = \\frac{Px}{Pz},"

"MPx = Y'(x) = 0.2(Z\/X)^{4\/5} ,"

"MPz = Y'(z) = 0.8(X\/Z)^{1\/5},"

"\\frac{0.2(Z\/X)^{4\/5}}{0.8(X\/Z)^{1\/5}} = \\frac{Px}{Pz},"

"0.25(\\frac{Z}{X})^{4\/5}= \\frac{Px}{Pz}."


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