Phil's Utility Function Is U = XY, Where MU_X =

question 36

Essay

Phil's utility function is U = XY, where MU_X = Y and MU_Y = X. In Lancaster, Pennsylvania, Phil's income would equal $500, and the prices of good X and good Y are $5 and $5, respectively. In Washington, D.C., Phil's income would equal $800, and the prices of good X and good Y are $8 and $10, respectively. Where should Phil live? Show your work.

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Definitions:

Payor Bank

The bank on which a check is drawn and that is responsible for paying the amount of the check to the holder.

Collection Process

The steps taken by creditors or agencies to recover debts owed by individuals or businesses, often involving contacting the debtor, negotiating payment plans, and possibly legal action.

Demand Instrument

A financial document or instrument that requires payment of a particular sum of money immediately or on demand by the entitled party.

Certificate Of Deposit

A savings certificate with a fixed maturity date and specified fixed interest rate, issued by a bank to a depositor.