Quiz 4:

Q:  Find demand for good x if u(x,y)=xy, I=80 and Py=2.

A:  Setting the MRS = Px/Py we have y/x=Px/2 or 2y=x*Px.  The budget constraint is 80=Px * x +2y so we have 80=2Px*x or x=40/Px.