Question

Beth has $200 of income to spend on e-books (E), priced at $10 per book, and Zumba (Z) classes, priced at $8 per class. Which of the following consumption bundles is infeasible? E = 10 and Z = 13

E = 2 and Z = 22

E = 8 and Z = 15

E = 20 and Z = 0

Answer 1

If the consumer couldn't able to purchase non-integer quantities of goods, ie. indivisibility of the bundles is considered as infeasible. The consumption possibility set that are affordable are considered as feasīble set of bundles for the consumers. Under this good are perfectly divisible. These set are convex. Beth has $200 of income to spend on e-books priced at $10 per book and Zumba (Z) classes, priced at $8 per class. The budget constraint would be 10E+8Z 200 Substitute the value of consumption bundles to check the feasibility: a) E 10 and Z 13 M 10E 8Z -10x10+8x13 -100+104 204 Since, the consumption bundles is lie outside the budget constraint. Hence, consumption bundle is infeasible. b) E 2 and Z 22 M 10E+8Z = - 10x2 +8x22 -20+176 -196 Hence, consumption bundle is feasible.

c) E 8 and Z 15 = M 10E 8Z -10x8+8x15 80 120 - 200 Hence, consumption bundle is feasible. d) E 20 and Z= 0 M 10E 8Z =10x 20 8x0 - 200+0 = 200 Hence, consumption bundle is feasible. Hence, option A is correct.