The next two questions 19 and 20 are based on the following :
Suppose a consumer wants to consume two commodities both of which are available only in discrete units. Let the prices of the goods be Rs 4 and Rs 3 respectively. The consumer's income is Rs 10.
Suppose the price of both commodities fall by 10 paisa and money income increases by 10 paisa. If the preference of the consumer over the two goods have not changed, then
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Budget constraint and consumer equilibrium has come up 99 times in 7 exams since 2004.
This question is on Non-standard budgets: bundles, rationing and quantity limits, part of Budget constraint and consumer equilibrium in Microeconomics.
Budget sets with bundled offers, tie-ins, quantity caps, block prices or liquidity constraints.
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Question from the JNU SSS 2010 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.