Microeconomics
Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Chapter 8, Problem 3IP

(a)

To determine

The impact of reducing pollution.

(b)

To determine

The reasons for increase in pollution.

(c)

To determine

An economically efficient policy to reduce pollution.

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The preferences of a consumer are represented by the following utility function: U = min (×1, 2x2) If income is 100 and p1=p2=1 a) What is the optimal bundle? b) If p₁=4, what is the new optimal bundle? c) If p2=4, what is the new optimal bundle? d) Decompose the price effect into income and substitution effect and provide a graphical representation of your results.
Challenges of Nepal's foreign trade.
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