Question

III. Answer any TWO of the following project oriented questions. 2x5 =10
49. A consumer wants to consumes two goods. The Price of Bananas is Rs 5 and the price of mango
is Rs.10 The consumer income is Rs 40.
a) How much Bananas Can she consumes if she spend her entire income on that good?
b) How much mangoes can she consume if she spend her entire income on that good?
c) Is the slope of budget line downward or up word?
d) Are the Bundles on the budget line equal to the consumer’s income or not?
e) If you want to have more of Bananas you have to give up mangoes. Is it true?

Answer 1

Answer:

(a) 8

b)4

c)up ward

d)yes

Explanation:

a)40÷5=8

b)40÷10=4

c)this is because the income is more than the single good

d)

e)not at all because the mango is more costly than banana