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# Utility and Marginal Utility Question watch

1. Been Struggling with this problem in my revision for my year 2 exams.

Jane purchases 2 goods, X and Y, her Utility function is U = 4Y^0.25*X^0.5

Jane has an income of £1200, the price of X is £10 and Y £40

What is Janes optimal consumption of X and Y? What is the value of her total utility?

So Far I have done this:

Py*y + Px*x = M
Py*y = M - Px*x
y = (M/Py) - (Px/Py)*x Budget Constraint Equation

y = (1200/40) - (10/40)*x
y = 30 - (1/4)*x

For Equilibrium

-(Px/Py) = - (MUx/MUy)

Could someone please take me through the steps of calculating the MUx and MUy.

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Updated: May 15, 2013
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