Question

(I) Suppose a consumer wants to consume goods which are available in integer units. The goods (X &Y) are equally priced at Rs.5 and consumer’s income – Rs.20
Given the above values answer the following questions-
1) Can consumer consume following bundles- A. [3,2]
B. [4,4] C. [2,2] D. [2,1]
2) State the equation for budget line.
3) How many units of good y can be consumed if all money income is spent on
Good y only?
4) State all the bundles lying the budget line and plot the graph.
5) What will be market rate of exchange of good Y for X?

Answer 1

1. (d.) (2.,2)

2. Idk

3. 4

4. It's i the form (x,y)

(1,3) (2,2) (3,1

5. 0