0 marksMicroeconomicsBudget constraint and consumer equilibriumDemand under complements, substitutes and quasilinear utilityHardabout 3 min

DSE 2016 Question 24: Budget constraint and consumer equilibrium

A consumer has utility $u(x_1,x_2)=\min\{3x_1+x_2,\ x_1+2x_2\}$ . Prices are $p_1$ and $p_2$ . The consumer buys positive quantities of both goods if and only if the price ratio $p_1/p_2$ is:

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A consumer has utility u(x₁,x₂)=min {3x₁+x₂, x₁+2x₂}. Prices are p₁ and p₂. The consumer buys positive quantities of both goods if and only if the price ratio p₁/p₂ is: (A) greater than 3 (B) between 1/2 and 3 (C) between 2 and 3 (D) less than 1/2

Also written as: A consumer has utility u(x_1,x_2)=min {3x_1+x_2, x_1+2x_2}. Prices are p_1 and p_2. The consumer buys positive quantities of both goods if and only if the price ratio p_1/p_2 is:

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

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.

GATE 2023 · Q27An individual is endowed with income of Rs. 142 and has the utility function U(x₁,x₂) = x₂(x₁+1), where x₁ ≥…

Practise Budget constraint and consumer equilibrium More on Demand under complements, substitutes and quasilinear utility

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Plain-text version

Also written as: A consumer has utility u(x_1,x_2)=min {3x_1+x_2, x_1+2x_2}. Prices are p_1 and p_2. The consumer buys positive quantities of both goods if and only if the price ratio p_1/p_2 is:

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

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.

GATE 2023 · Q27An individual is endowed with income of Rs. 142 and has the utility function U(x₁,x₂) = x₂(x₁+1), where x₁ ≥…

Question from the DSE 2016 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.

DSE 2016 Question 24: Budget constraint and consumer equilibrium

Answer and worked solution

What this question tests

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DSE 2016 Question 24: Budget constraint and consumer equilibrium

Answer and worked solution

What this question tests

Similar questions from other papers