2011

[tim]

Q42
a consumr has utility fn u = min (2x1+x2,x1+2x2). her income is 100  n p1=20 n p=30.the amt of x1 in utility maximising bundle is
1. 7
2. 5
3. 2
4. 0
 ans 2

with same utility fn n income as above, but suppose prices r p1=10, p2=30. the amt of utility maximisin bundle is
1. 10
2. 5
3. 2.5
4. 0

cn someone confirm the answer of the 2nd one ??

[a.m]

hey tim. kindly elaborate how to maximise the utility for the question !

[mukund sharma]

if u try to solve with the lagrangian method with the constraint u get 2.5 as the answer for the commodity x1
but use ur discriminative power and see the answer should be 10 as at that commodity bundle the utility is maximised at 10. so he purchases all of good x1 and nothing of x2. so the answer is 10.
if the answer would have been 2.5 then utility would have been only 7.5

[Khagesh]

i dunno wat u all tryin to do....
bt as far i knw...for such func of U we equate the 2 things i.e.

2x1 + x2 = x1 + 2x2

solving we get x1=x2

so we use dis n solve d eqn of cost constraint bt den also chck for boundary values wherein here provides the solution!!