The Consumption basket of a consumer has two goods, X and Y. If he spends the entire income on these two goods, he can buy 4 units of X and 6 units of Y; or he can buy 12 units of X and 2 units of Y. If he spends his entire income on X alone, what is the number of units of X that he can buy?
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Budget constraint and consumer equilibrium has come up 99 times in 7 exams since 2004.
This question is on Budget set and budget line, part of Budget constraint and consumer equilibrium in Microeconomics.
Which bundles a consumer can afford, the slope of the budget line, and how income and price changes shift it.
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Question from the UoH 2015 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.