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Questions › DSE › DSE 2011 › Q42
2 marksMicroeconomics › Budget constraint and consumer equilibrium › Demand under complements, substitutes and quasilinear utilityModerateabout 3 min

DSE 2011 Question 42: Budget constraint and consumer equilibrium

Consider the same utility function and income as above, u=min⁡{2x1+x2, x1+2x2}u=\min\{2x_{1}+x_{2},\ x_{1}+2x_{2}\}u=min{2x1​+x2​, x1​+2x2​}, y=100y=100y=100, but suppose the prices are p1=10p_{1}=10p1​=10 and p2=30p_{2}=30p2​=30. Then the amount of x1x_{1}x1​ in the utility maximizing bundle is

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Consider the same utility function and income as above, u=min {2x₁+x₂, x₁+2x₂}, y=100, but suppose the prices are p₁=10 and p₂=30. Then the amount of x₁ in the utility maximizing bundle is (A) 10 (B) 5 (C) 2.5 (D) 0

Also written as: Consider the same utility function and income as above, u=min {2x_1+x_2, x_1+2x_2}, y=100, but suppose the prices are p_1=10 and p_2=30. Then the amount of x_1 in the utility maximizing bundle is

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What this question tests

This question is on Demand under complements, substitutes and quasilinear utility, part of Budget constraint and consumer equilibrium in Microeconomics.

Deriving demand when preferences are L-shaped, linear or quasilinear, and what that implies for income and price responses.

TestStop has 23 past-paper questions on this subtopic; the nearest in year are below.

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