Answer in Microeconomics for Isabelle miyanda #112778
April 21st, 2023
Solution:
i)
“Q=2times(xy)^{0.5}”
“P_x=10, P_y=40, I=80”
“P_xQ_x+P_yQ_y=I”
“Q_x=x, Q_y=y”
ii)
“10x+40y=80”
“frac{partial Q}{partial x}=2y^{0,5}x^{-0.5}”
“frac {partial Q}{partial y}=2x^{0.5}y^{-0.5}”
“frac {frac {partial Q}{partial x}}{P_x}=frac {frac{partial Q}{partial y}}{P_y}”
“frac {2 y^{0.5}}{10 x^{0.5}}= frac {2 x^{0.5}}{40 y^{0.5}}”
“x=4, y=1”
iii)
“Q=2(4times 1)^{0.5}=4”
iv)
An increase in budget for k1 will lead to a decrease in budget for k2
