Cost - June 18

[Amit Goyal]

June18__Cost.png

[anon_econ]

No evidence that they hv not been minimizing costs.
And no, it can't be produced using that combo bcoz at the second set of prices the cost of buying that bundle would be 2500 but they r buying a bundle that costs them 3000.

[aditi5000]

There is no evidence that they are not minimising cost. when pSoya>pCorn, they buy corn. When Pcorn>Psoya they buy Soya and when the prices are equal they buy a convex combination of the two.
At the first set of prices, both combinations 50,150 and 150,50 cost the same but they chose 150,50. (revealed preferred). This means 50,150 doesn't produce a coop of chickens. And in situation 2 prices, 50,150 is cheaper than 0,300 but they didn't choose this bundle and this also means that this combination can't produce a coup of chickens..

[Amit Goyal]

Well done, Both of you.