Hello,

I have one question about consumer equilibrium. Is the consumer equilibrium constrained by the budget? Take my case as an example; the equilibrium price is at 4 units of Rocks (the marginal utility per dollar should be 1.81 to be equal to the utility of Camping) and 6 units of Campings. Still, the budget does not allow me to spend that much. So, is the consumer equilibrium defined both by the maximum value of my budget and the combination of goods that will yield the most benefit for me; Or we need to plug in data to the formula MU1/P1=MU2/P2 to find the consumer equilibrium without any regard to the budget constraint?

Thank you.

iii httpszaEcom .lyryxcom/studemrservletS/LabServle-tkcid = 3820 Q WIS] A Wasim loves to go on Camping trips. Going on a Camping trip costs Wasim a total of $43 per trip. Wasim also loves to go to Rock concerts. Going to a concert costs Wasim a total of $20 per concert. Wasim must allocate his monthly entertainment budget carefully, and has evaluated how much satisfaction, measured in utils, he obtains from each Camping trip and each Rock concert visit. Wasim's total utility from each activity is independent of the amount of the other activity he engages in. Wasim has an entertainment budget of $295. Suppose that the price of a Rock concert increases to $22 from $20. The income budget remains at $295. Visits past 7 will not give any extra utility. a) Compute Wasim's original equilibrium (before the price change). Original number of Camping trips = I Original number of Rock concerts = I b) Fill out the table for the new MUIP for Rock concerts (after the price change). Keep as much precision as possible during your calculations. Your nal answer should be accurate to at least two decimal places. c) Compute Wasim's new equilibrium (after the price change). . :: pTypeheretosearch o a;- 3-l 0305. 000 aAl-aumrsmmm