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Homework answers / question archive / University of Pittsburgh-Pittsburgh Campus - ECON 1100 1)Originally the consumer faces the budget line p1x1 + p2x2 = m
University of Pittsburgh-Pittsburgh Campus - ECON 1100
1)Originally the consumer faces the budget line p_{1}x_{1 }+ p_{2}x_{2 }= m. Then the price of good 1 doubles, the price of good 2 becomes 8 times larger, and income becomes 4 times larger. Write dow an equation for the new budget line in terms of the original prices and income.
? Is the utility function a monotonic
transformation of u(x_{1},x_{2}) ?
(
p1 = 1 when x 1 ≤ 12
2 when x_{1 }> 12
Can he consume the bundle (16,4) ?
Solve for this consumer’s demands for x and y.
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