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John Consumes Two Goods, X and Y

Question 48

Essay

John consumes two goods, X and Y. The marginal utility of X and the marginal utility of Y satisfy the following equations:
MUX = Y MUY = X.
The price of X is $9, and the price of Y is $12.
a. Write an expression for John's MRS.
b. What is the optimal mix between X and Y in John's market basket?
c. John is currently consuming 15 X and 10 Y per time period.
Is he consuming an optimal mix of X and Y?

Correct Answer:

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a.MRS = blured image = blured image b.Optimal mix of X and Y:
MR...

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