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= 1/ 23/2. If the prices for goods 1 and 2 are, and respectively, and income is M, what is the Consider a consumer with a uti

Consider a consumer with a utility function y = 1/2/3/2. If the prices for goods 1 and 2 are 2 and 4 respectively, and income

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11, 312 m Income At optimal bundle : MRS. 1 -1/2-3/2 constra Budget constraint- en + b = m. Px + h | P (37)] = mup, x, = m M . ЧР Hence, option (B) is correct (2.) Now P, = 2 - = 4 and P I-40 Then x - you yoDos a [3] Flence, option (A) is correct my - to mo - 221, 12 mes to Az 27,74 224 At optimal bundleMRS / Budget constraint Pat P P = M. Bit & P [21, x 7 M I h la + 21, 2, - m 31, x = M ti 30the ginen Hence, TRUE optimal bundle is Nowo - M = 30 And if optimal consumption is when - M. We know that, at optimal bund S

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