Answer to Question #266203 in Microeconomics for farouk

Question #266203

If the price of good X is $10 and the price of good Y is $5, how much of good X can the consumer purchase if her income is $15 and she spends it entirely on purchasing good X?


a. 1.5


b. 0


c. 3


d. 2


1
Expert's answer
2021-11-15T10:15:26-0500

Solution:

The correct answer is a. 1.5.

 

Budget constraint: I = PxX + PyY

I = 15

Px = 10

Py = 5

15 = 10X + 5Y

Good X = "\\frac{15}{10}" = 1.5


The consumer can purchase an amount of Good X = 1.5


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