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notka56 [123]
3 years ago
6

Alexandra is maximizing her utility over goods x and y subject to her budget constraint. Her preferences are smooth (maximizers

are always interior). At her optimal consumption bundle, her MRS of goof y for good x is equal to 1. The price of good x is $4. What is the price of good y?
Business
1 answer:
VashaNatasha [74]3 years ago
7 0

Answer: $4

Explanation: The optimization ratio between good x and y is the same .

In other words .Alexandra is maximizing her utility over goods x and y subject to her budget constraint at constant ratio . This is from the fact that At her optimal consumption bundle, her MRS of goof y for good x is equal to 1.

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