There are two goods and John's preferences can be represented by u: R30→R given by u(x) = x₁x₂. His income and price of the two goods are given by (M, P₁ P2) = (12, 1, 2). Which 2 of the following 8 options are false: In John's optimal bundle, he consumes the same amount of good 1 as good 2. If we change John's utility function to u(x) = x + x then John's optimal bundle remains unchanged. At John's optimal bundle, the slope of the budget constraint equals the slope of the indifference curve.

There are two goods and John's preferences can be represented by u: R30→R given by u(x) = x₁x₂. His income and price of the two goods are given by (M, P₁ P2) = (12, 1, 2). Which 2 of the following 8 options are false: In John's optimal bundle, he consumes the same amount of good 1 as good 2. If we change John's utility function to u(x) = x + x then John's optimal bundle remains unchanged. At John's optimal bundle, the slope of the budget constraint equals the slope of the indifference curve.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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