Question

using the given information what will be the optimal production bundle

income = $10
Utility function : xy
Px = Py = 1

a) 5,5
b)6,4
c)4,6
d)8,2

Answer 1

Heya....

I think option D is correct...

Because Px and Py are just equal...

And the monotonic Preference is also applying on this....

Suppose...Good x is giving 8 utiles ...
Good y is giving 2 utiles....

In this MUx + MUy is equal to income that is 10....And large amount is also...