1. Business
  2. Economics
  3. please solve question 6 using mrs and price ratio method...

Question: please solve question 6 using mrs and price ratio method...

Question details

Please solve Question 6 using MRS and price ratio method. Please explain and clarify steps as I am completely lost with this problem.

In Problems 5 - 7, you are given the utility function u(x, y), income I and two sets of prices: initial prices pa.Py and final prices prpy. For each problem, you are to find: (a) the optimal choice at the initial prices (b) the optimal choice at the final prices (c) the change optimal choice at final prices- optimal choice at initial prices (d) the income effect and the substitution effect 5) u(z, y)-min(z, 3y), 1-14; P.-1, Pv-2, P,-2, p,-2

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution