6) A consumer of two goods, good 1 and good 2 has a utility function u (X1, X2)= X1 0,6. X2 0,4, where x1 denotes units of good 1 and X2 units of good 2. Theprice of good 1 is 5 euros per unit, the price of good 2 is 3 euros per unit and the consumer's income is 150 euros. Suppose onlychange the price of good 1 And that the new price is p, = 2.Then the Slutsky substitution effect with respect to good 1 isChoose one:A) 8.8B) 9.8C) Not definedD) 7.8E) 10.8 Un consumidor de dos béns, bé 1 i bé 2, té una funció d'utilitat u(x,,X)= x6 - x04 on x, denota unitats de bé 1 i x, unitats de bé 2. Elpreu del bé 1 és 5 euros per unitat, el preu del bé 2 és 3 euros per unitat i la renda del consumidor és de 150 euros. Suposeu que noméscanvia el preu del bé 1i que el nou preu és p, 2.Aleshores, l'efecte substitució de Slutsky respecte al bé 1 ésTrieu-ne una:a. 8.8b. 9.8C. No definitd. 7.8e. 10.8

When price of the good changes, there occurs substitution effect and income effect. Substitution…

Answered: A consumer of two goods, good 1 and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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6) A consumer of two goods, good 1 and good 2 has a utility function u (X1, X2)= X1 0,6. X2 0,4, where x1 denotes units of good 1 and X2 units of good 2. The

price of good 1 is 5 euros per unit, the price of good 2 is 3 euros per unit and the consumer's income is 150 euros. Suppose only

change the price of good 1 And that the new price is p, = 2.

Then the Slutsky substitution effect with respect to good 1 is

Choose one:

A) 8.8
B) 9.8
C) Not defined
D) 7.8
E) 10.8

Un consumidor de dos béns, bé 1 i bé 2, té una funció d'utilitat u(x,,X)= x6 - x04 on x, denota unitats de bé 1 i x, unitats de bé 2. El
preu del bé 1 és 5 euros per unitat, el preu del bé 2 és 3 euros per unitat i la renda del consumidor és de 150 euros. Suposeu que només
canvia el preu del bé 1i que el nou preu és p, 2.
Aleshores, l'efecte substitució de Slutsky respecte al bé 1 és
Trieu-ne una:
a. 8.8
b. 9.8
C. No definit
d. 7.8
e. 10.8

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