Question:
For the utility function u(x, y) = xy and given budget constraint M = pxx+pyy. what is the optimum bundle of consumption of x and y?
For the utility function u(x, y) = xy and given budget constraint M = pxx+pyy. what is the optimum bundle of consumption of x and y?
Updated On: May 18, 2024
- \((\frac{M}{P_x},\frac{M}{P_y})\)
- \((\frac{M}{2P_x},\frac{M}{2P_y})\)
- \((\frac{M}{P_y},\frac{M}{P_x})\)
- \((\frac{M}{P_y},\frac{M}{P_x})\)
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The Correct Option is B
Solution and Explanation
The correct answer is (B) : \((\frac{M}{2P_x},\frac{M}{2P_y})\)
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