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प्रश्न
A consumer wants to consume two goods. The prices of the two goods are Rs 4 and Rs 5 respectively. The consumer’s income is Rs 20.
How much of good 2 can be consumed if he/she spends his/her entire income on that good?
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उत्तर
If Rs 20 is entirely spent on good 2, then x1 = 0, as the consumer has no income left to spend on good 1.
4(0) + 5(x2) = 20
5(x2) = 20
`x_2 = 20/5`
x2 = 4 units
Amount of good 2 consumed = 4 units
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संबंधित प्रश्न
Define budget set.
Explain the meaning of Budget line.
Write a budget line equation of a consumer if the two goods purchased by the consumer, Good X and Good Y are priced at Rs 10 and Rs 5 respectively and the consumer's income is Rs 100.
Find Consumption Expenditure from the following:
|
National Income |
= Rs 5,000 |
|
Autonomous Consumption |
= Rs 1,000 |
|
Marginal propensity to consume |
= 0.80 |
What do you mean by the budget set of a consumer?
What is a budget line?
Explain why the budget line is downward sloping.
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Write down the equation of the budget line.
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How does the budget line change if the price of good 2 decreases by a rupee but the price of good 1 and the consumer’s income remain unchanged?
What happens to the budget set if the prices as well as the income double?
Suppose a consumer can afford to buy 6 units of good 1 and 8 units of good 2 if he/she spends her entire income. The prices of two goods are Rs 6 and Rs 8. How much is the consumer’s income?
Answer the following question.
What can cause a change in the budget line? Explain.
