John has the utility function U(x1,x2) = min{x1 +2x2 , 2x1+x2}. He has 90Ł to spend on beef and lamb. If the price of beef is 10Ł per unit and the price of lamb is 40Ł. a) Draw the budget curve and indifference curves. b) What will be the ordinary demand of John?
John has the utility function U(x1,x2) = min{x1 +2x2 , 2x1+x2}. He has 90Ł to spend on beef and lamb. If the price of beef is 10Ł per unit and the price of lamb is 40Ł. a) Draw the budget curve and indifference curves. b) What will be the ordinary demand of John?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:John has the utility function U(x1,x2) = min{x1 +2x2, 2x1+x2}. He
has 90Ł to spend on beef and
lamb. If the price of beef is 10Ł per unit and the price of lamb is
40Ł.
a) Draw the budget curve and indifference curves.
b) What will be the ordinary demand of John?
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