For problems 1, 2, 3, we consider an agent Ann who consumes goods and y and has a utility U(x, y) = x²y. In these problems, Good x costs P₂ and good y costs Py. (1) Ann has I to spend. (a) Write out Ann's utility maximization problem. (b) Find: MU, MUy, and MRS zy- (e) Write out Ann's tangency condition. What is the other equation needed to solve for Ann's demand? (d) Find Ann's demands for x and y as functions of Pz, Py, and I. (Partial credit if you do this only for I = 30, P₂ = 5 and Py = 2.)

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Chapter1: Making Economics Decisions
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c and d please

For problems 1, 2, 3, we consider an agent Ann who consumes goods and y and has a utility
U (x, y) = x²y. In these problems, Good costs P, and good y costs Py.
(1)
Ann has I to spend.
(a) Write out Ann's utility maximization problem.
(b) Find: MU, MUy, and MRSxy.
(c) Write out Ann's tangency condition. What is the other equation needed to solve for Ann's
demand?
(d) Find Ann's demands for x and y as functions of P₂, Py, and I. (Partial credit if you do this
only for I = 30, P₂z = 5 and Py = 2.)
Transcribed Image Text:For problems 1, 2, 3, we consider an agent Ann who consumes goods and y and has a utility U (x, y) = x²y. In these problems, Good costs P, and good y costs Py. (1) Ann has I to spend. (a) Write out Ann's utility maximization problem. (b) Find: MU, MUy, and MRSxy. (c) Write out Ann's tangency condition. What is the other equation needed to solve for Ann's demand? (d) Find Ann's demands for x and y as functions of P₂, Py, and I. (Partial credit if you do this only for I = 30, P₂z = 5 and Py = 2.)
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