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Kindly solve this with explanation Consider a 2-good economy and a consumer endowed with a positive net income m. If the unit prices of goods
Kindly solve this with explanation
Consider a 2-good economy and a consumer endowed with a positive net income m. If the unit prices of goods are p1 and p2 with p1=2p2 and the consumer is invariably indifferent between 5 units of the first good 1 and 8 units of the second good 2. Than the consumer will choose to consume amounts x1 of the first good and x2 of the second good such that;
- P1x1=p2x2
- X=0, x2>0
- X1>0, x2=0
- None of the answers is correct
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