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Questions › CUET-PG › CUET-PG 2025 › Q37
4 marks, −1Microeconomics › Budget constraint and consumer equilibrium › Corner solutionsModerateabout 1 min

CUET-PG 2025 Question 37: Budget constraint and consumer equilibrium

An individual's utility function for two goods - milk (M) and butter (B) is given as U(M,B)=5M−10BU(M,B) = 5M - 10BU(M,B)=5M−10B and the cost of each unit of the two goods is Rs 1 and the individual's weekly budget is Rs 5. Find the individual's utility maximizing choice

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An individual's utility function for two goods - milk (M) and butter (B) is given as U(M,B) = 5M - 10B and the cost of each unit of the two goods is Rs 1 and the individual's weekly budget is Rs 5. Find the individual's utility maximizing choice (A) 2.5 units of M and 2.5 units of B (B) 0 unit of M and 5 units of B (C) 5 units of M and 5 units of B (D) 5 units of M and 0 unit of B

Budget constraint and consumer equilibrium has come up 99 times in 7 exams since 2004.

What this question tests

This question is on Corner solutions, part of Budget constraint and consumer equilibrium in Microeconomics.

Optima at the edge of the budget set, where the consumer spends nothing on one good.

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