JNU SSS 2012 Question 57: Budget constraint and consumer equilibrium
In a two-good world, there is an individual with income m=3 and utility function is given by u(x,y)=x0⋅5y0⋅5. The price of good x is 1 per unit and the price of good y is also 1 per unit.
If the individual can consume either zero unit of good x or at most one unit of x and any non-negative amount of good y, then the optimum consumption bundle is
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In a two-good world, there is an individual with income m = 3 and utility function is given by u(x, y) = x^(0· 5) y^(0· 5). The price of good x is 1 per unit and the price of good y is also 1 per unit. If the individual can consume either zero unit of good x or at most one unit of x and any non-negative amount of good y, then the optimum consumption bundle is (A) x = 1, y = 2 (B) x = 1, y = 3 (C) x = 0, y = 3 (D) x = 3, y = 0
Also written as: In a two-good world, there is an individual with income m = 3 and utility function is given by u(x, y) = x^(0* 5) y^(0* 5). The price of good x is 1 per unit and the price of good y is also 1 per unit. If the individual can consume either zero unit of good x or at most one unit of x and any non-negative amount of good y, then the optimum consumption bundle is
Budget constraint and consumer equilibrium has come up 99 times in 7 exams since 2004.
What this question tests
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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