Homework answers / question archive / Let an individual's utility function be given as u(x1,x2) = 2/X1, X2 Given the prices P1=1 and P2=2 for the first and second good, respectively, and a budget of m = 100, what is the best consumer choice ? 2- Assume that price of good 1 (P) increses to 2 liras

Let an individual's utility function be given as u(x1,x2) = 2/X1, X2 Given the prices P1=1 and P2=2 for the first and second good, respectively, and a budget of m = 100, what is the best consumer choice ? 2- Assume that price of good 1 (P) increses to 2 liras

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Let an individual's utility function be given as u(x1,x2) = 2/X1, X2 Given the prices P1=1 and P2=2 for the first and second good, respectively, and a budget of m = 100, what is the best consumer choice ? 2- Assume that price of good 1 (P) increses to 2 liras. Find the new consumption bundle and show it in tha graph. 3- Explain and show in graph what budget line and indifference curves are. Please also show optimal consumption bundle and explain. Duration: 90 minutes. First and Second question are 40 points each. Third question is 30 points.