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a person has $200 to spend on two goods X and Y whose respective prices are $7 and $9 draw the budget line? what happens to the original budget line if the budget falls by %50 ?what happen to the originale budget line if the price of X doubles? what happen to the originale budget line to be spent if the price of Y falls to $8?
A consumer buys an Iphone for Php12,000 and gets consumer surplus of Php8,000.
a. What is the consumer surplus?
b. If the consumer had bought the Iphone on sale for Php9000, what would the consumer surplus have been?
c. If the price of an Iphone were Php2500, what would the consumer surplus have been?
Given that utility function for a consumer is given by u = (x-3)2 + (y-4)2, draw any two
indifference curves for this consumer while clearly labelling the higher one as ‘H’ and lower
one as ‘L’. Does he prefer more of a good to less of it? Does he prefer averages to extreme
bundles? Explain.
Check if the following utility functions represent the same preferences: u = x+y, v = x3 +
y3, w = -1/(x+y). Give reasons for your answer.
