Answer in Microeconomics for GP #111562
April 21st, 2023
Solution:
“Q=2(xy)^2”
“p_x=10, p_y=40, I=80”
i)
“frac{frac{partial Q}{partial x}}{p_x}=frac{frac{partial Q}{partial y}}{p_y}”
“frac{partial Q}{partial x}=frac {2y^{0.5}}{x^{0.5}}”
“frac{partial Q}{partial y}=frac {2x^{0.5}}{y^{0.5}}”
ii)
“4y=x”
y=1; x=4.
iii)
“Q=2(1*4)^{0.5}=4”
iv)
An increase in budget x will lead to a decrease in production y.
