;) Given preferences represented by the utility function u(x1, x2) = min{3x1, x2}. a) Write down the budget constraint, optimal consumption proportion line and functions of demand for x1 and x2. b) Let m = 100, p1 = 2, and p2 = 4. Find the auantities demanded for x1 and x2.

;) Given preferences represented by the utility function u(x1, x2) = min{3x1, x2}. a) Write down the budget constraint, optimal consumption proportion line and functions of demand for x1 and x2. b) Let m = 100, p1 = 2, and p2 = 4. Find the auantities demanded for x1 and x2.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

;) Given preferences represented by the utility
function u(x1, x2) = min{3x1, x2}.
a) Write down the budget constraint, optimal
consumption proportion line and functions of
demand for x1 and x2.
b) Let m = 100, p1 = 2, and p2 = 4. Find the
quantities demanded for x1 and x2.
c) Suppose p1 increases to p1 = 10. Now what is
%3D
the optimal bundle?

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