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# Answer to Question #111426 in Microeconomics for tran thi chinh

Question #111426
You are choosing between two goods, X and Y, and your total utility from each is shown below:

Units TUX TUY
1 10 8
2 18 15
3 24 21
4 28 26
5 31 30
6 33 33

a. If your income is $9 and the prices of X and Y are$2 and $1, respectively, what quantities of each will you purchase in maximizing utility? b. Specify the amount of total utility you will realize? c. Assume that, other things remaining unchanged, the price of X falls to$1. What quantities of X and Y will you now purchase?

d. Using the two prices and quantities for X, graphically derive a demand curve for X.
1
2020-04-23T11:56:40-0400

Solution:

a) To maximize utility, the following conditions must be met simultaneously:

"\\frac{MU_x}{p_x}=\\frac{MU_y}{p_y}"

"q_xp_x+q_yp_y=I"

I=9 ; "p_x=2" ; "p_y=1"

Only one option satisfies these conditions: x=2, y=5.

b)

"TU=TU_x+TU_y=18+30=48"

c) If "p_x=1" then x=4, y=5,

d)

"Q_d=6-2p"

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