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Questions › IIT JAM › IIT JAM 2025 › Q50
1 markMicroeconomics › Budget constraint and consumer equilibrium › Utility maximisation and the interior optimumModerateabout 2 min

IIT JAM 2025 Question 50: Budget constraint and consumer equilibrium

Suppose utility function of a consumer is u(x,y)=xyu(x,y)=xyu(x,y)=xy, where xxx and yyy are quantities of the two commodities consumed. If price of xxx is Re.1 and that of yyy is Rs.2, and income of the consumer is Rs.100, utility maximizing quantity consumption of xxx is ________.

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Plain-text version

Suppose utility function of a consumer is u(x,y)=xy, where x and y are quantities of the two commodities consumed. If price of x is Re.1 and that of y is Rs.2, and income of the consumer is Rs.100, utility maximizing quantity consumption of x is.

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

What this question tests

This question is on Utility maximisation and the interior optimum, part of Budget constraint and consumer equilibrium in Microeconomics.

Choosing the best affordable bundle where an indifference curve is tangent to the budget line, including Cobb-Douglas demand.

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