# Consumer's Demand Curves for Two Goods

Question 1

Suppose a consumer's utility function is U = X0.1Y0.9 with marginal utilities of MUX = 0.1X-0.9Y0.9 and MUY = 0.9X0.1Y-0.1.
They have an income of 100 to purchase goods X and Y. Round answers to one decimal place.

1) What is the consumer's optimal bundle when the price of X is 2 and the price of Y is 9?

X*= Y*=

2) What is the consumer's optimal bundle when the price of X is 5 and the price of Y is 9?

X*= Y*=

3) What is the consumer's optimal bundle when the price of X is 2 and the price of Y is 10?

X*= Y*=

4) Using the bundles from 1) and 2), what is the slope and choke price for the consumer's inverted linear demand curve for X?

Slope = Choke Price =

5) Using the bundles from 1) and 3), what is the slope and choke price for the consumer's inverted linear demand curve for Y?

Slope = Choke Price =

6) Based on the above demand curves, what prices are estimated to maximize the total revenues/expenditures of X and Y?

Px = Py =

Score = 0