markblake replied

427 weeks ago

A consumer spends Rs 80 on x1 and x2 and his utility function is u(x1 , x2) = (x1 . x2) ^ 1/2 { square root of the product of x2 and x2} . If he is known to have rejected two bundles (2,3) and (6,1) which cost the same amount. Find the optimum bundle

Now suppose the price of x2 is fixed but the govt. can change the price of x1 as well as his money income. What would be the price of x1 and income of the consumer such that he finds (6,1) to be optimal bundle?


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