A. Combinations of X1 and X2 that fulfill the necessary conditions of consumer equilibrium: (X1=10, X2=10), (X1=9, X2=11), (X1=8, X2=12), (X1=7, X2=13), (X1=6, X2=14), (X1=5, X2=15).
B. Consumer’s equilibrium purchase size: (X1=10, X2=10).
Assume an individual has 20 birr to spend on two products: X1 and X2 each with market price of 2(two) birr. If the total utility the consumer generates from the two products is as given on the table below,
1.1= Select all combinations of X1 and X2 that fulfill the necessary conditions of consumer equilibrium, and from them identify the consumer’s equilibrium purchase size
Q =1 2 3 4 5 6 7 8 9 10 11
TUX1 =16 30 41 51 60 68 75 81 86 89 90
TUX2 =15 28 40 48 54 59 63 66 68 69 69
1 answer
1 answer