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Graph this To determine the Slutsky demand, we need to compute the income that would make point A just affordable with the new prices. For
Graph this To determine the Slutsky demand, we need to compute the income that would make point A just affordable with the new prices. For this hypothetical income. Using the demand functions x1 = 60 x2 and x2 = 60 - x1, we substitute p1 = 1, p2 = 1, and x1 = 30 into the budget line p1x1 p2x2 = I. Solving for I, we get | = 60. Plugging this hypothetical income and the new prices into the demand functions in order to solve for point B. Using p1 = 1, p2 = 1, and I = 60, we substitute these values into the demand functions x1 = 60 x2 and x2 = 60 - x1. x1 = 30 and x2 = 30. Therefore, point B is (30, 30)
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