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Questions › JNU › JNU SSS 2018 › Q44
5 marksMicroeconomics › Budget constraint and consumer equilibrium › Demand under complements, substitutes and quasilinear utilityHardabout 10 min

JNU SSS 2018 Question 44: Budget constraint and consumer equilibrium

In a two-good world, a consumer's utility function is given by U(x,y)=x+yU(x, y) = x + yU(x,y)=x+y. Now suppose the price of good xxx is ₹ 2 and price of good yyy is also ₹ 2. The consumer has an income of ₹ 100. What are the utility maximizing consumption bundles (if any)? Explain your answer carefully.

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Plain-text version

In a two-good world, a consumer's utility function is given by U(x, y) = x + y. Now suppose the price of good x is ₹ 2 and price of good y is also ₹ 2. The consumer has an income of ₹ 100. What are the utility maximizing consumption bundles (if any)? Explain your answer carefully.

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.

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Question from the JNU SSS 2018 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.