Question

Suppose we have two goods. The price of good 1 is birr 10 and the price of good 2 is birr 15, and income is 60 birr.
A,Draw the budget constraint.
B,Show the demand for good 2 using the information given.

Answer 1

Question #45905, Economics, Microeconomics

Suppose we have two goods. The price of good 1 is birr 10 and the price of good 2 is birr 15, and income is 60 birr.

A, Draw the budget constraint.

B, Show the demand for good 2 using the information given.

a. The budget constraint:

b. The demand for good 2 will be:

- 0 unit (if we buy 6 units of good 1)

- 1 unit (if we buy 4,5 units of good 1)

- 2 units (if we buy 3 units of good 1)

- 4 units (if we buy 0 units of good 1)

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