Question

(a) Explain with the help of diagram how does consumer attain equilibrium given the

utility function U (x, y),the budget constraint Px X + Py Y < M where x and y are the

two goods and Px and Py are the prices of good x and good y respectively and M is the

income of the consumer.

(b) With the help of diagram, State the relationship between the compensated and the

uncompensated demand curve in terms of normal and inferior goods.

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Answer 1

Answer:

Ranjan bought a second hand scooter for rupee 6000 .He spent rupee 300 on its repairs and sold it to vineet at a profit of 10%. Vineet sold the scooter to Mukesh at a loss of 10% .At what price did buy the scooter