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Part 1. Assume p = 1 and p2 = 2, and the consumer has income M = 10. Find the consumption bundles for the
Part 1. Assume p = 1 and p2 = 2, and the consumer has income M = 10. Find the consumption bundles for the consumer's budget constraint. Find utility-maximizing following utility functions: (a) u(x, 1) = x + x (b) u(x,12)=. Part 2. Now assume the prices change to p = 2 and p2 = 1. What is his new budget constraint? What happens to the utility-maximizing consumption bundles in the two cases?
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Macroeconomics
Authors: Robert J Gordon
12th edition
138014914, 978-0138014919
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