Ms. Sulekha wants to buy two goods namely Samosa and Jalebi when she is having money income ₹ 200.00. The price of Samosa is ₹ 10.00 each and the price of Jalebi is ₹ 4.00 each. What proportion of income should she allocate on Samosa and Jalebi to maximise utility when the utlity function is where and stand for Samosa and Jalebi respectively.
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Ms. Sulekha wants to buy two goods namely Samosa and Jalebi when she is having money income ₹ 200.00. The price of Samosa is ₹ 10.00 each and the price of Jalebi is ₹ 4.00 each. What proportion of income should she allocate on Samosa and Jalebi to maximise utility when the utlity function is √(X₁X₂) where X₁ and X₂ stand for Samosa and Jalebi respectively. (A) 60% on X₁ and 40% on X₂ (B) 50% on X₁ and 50% on X₂ (C) 40% on X₁ and 60% on X₂ (D) 70% on X₁ and 30% on X₂
Also written as: Ms. Sulekha wants to buy two goods namely Samosa and Jalebi when she is having money income ₹ 200.00. The price of Samosa is ₹ 10.00 each and the price of Jalebi is ₹ 4.00 each. What proportion of income should she allocate on Samosa and Jalebi to maximise utility when the utlity function is sqrt(X_1X_2) where X_1 and X_2 stand for Samosa and Jalebi respectively.
Budget constraint and consumer equilibrium has come up 99 times in 7 exams since 2004.
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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Question from the JNU SSS 2020 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.