Suppose that the total utility function of a consumer is given by TU(x,y) = 4xy+2 y and the prices of X and Y are 1 Birr and 2 Birr per unit, respectively. If the income of the consumer is 60 Birr and if he spends all of his income on the consumption of commodities of X and Y, Find the optimum amount of X and Y that the consumer will consume at equilibrium Find MRTSx,y . Draw the budget line What happens to the original budget line if the budget falls by 50%? What happens to the original budget line if the price of X doubles? What happens to the original budget line if the price of Y increases to 4?

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Suppose that the total utility function of a consumer is given by TU(x,y) = 4xy+2 y and the prices of X and Y are 1 Birr and 2 Birr per unit, respectively. If the income of the consumer is 60 Birr and if he spends all of his income on the consumption of commodities of X and Y,
Find the optimum amount of X and Y that the consumer will consume at equilibrium
Find MRTSx,y .
Draw the budget line
What happens to the original budget line if the budget falls by 50%?
What happens to the original budget line if the price of X doubles?
What happens to the original budget line if the price of Y increases to 4?

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