Essay
Ezra's utility function is U = XY, where MUX = Y and MUY = X. In Lancaster, Pennsylvania, Ezra's income would equal $500, and the prices of good X and good Y are $5 and $5, respectively. In Washington, D.C., Ezra's income would equal $800, and the prices of good X and good Y are $8 and $10, respectively. Where should Ezra live? Show your work.
Correct Answer:
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In Lancaster, set MRS = Px/Py.
Y/X = 5/5 (...View Answer
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Correct Answer:
Verified
Y/X = 5/5 (...
View Answer
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Get Access to more Verified Answers free of charge
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