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

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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?

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1 answer:

VashaNatasha [74] · Answer 1 · 2022-01-14T18:00:29+03:00

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.