U 3X Y Px 6 Py 3 I 60 How much of X and Y should you buyS
U = 3X + Y; Px= 6; Py= 3; I = 60. How much of X and Y should you buy?
Solution
U = 3X+Y
I = 60
I = Px X + Py Y
60 = 6X + 3Y
20 = 2X+Y ------------------------------eq1
Now
MRS = Y/X = Px / Py
Y/X = 6/3
Y = 2X
2X-Y = 0 -------------------------------------eq2
Solve eq1 and eq2
So we get
X = 5 units
Y = 10 units
So he should 5 and 10 units of X and Y
