Discussion Problem_(15)

[duck]

Ms.X spends all her income on chocolates (X) and ice cream (Y).Her utility function is U(x,y)=Min{4x, 2x+y}. Suppose, Ms.X demands (x,y) = (M/px , 0) ie. no units if ice cream is consumed. For what price ratio can this be the case?

Hint: Plot IC.

[Mauli]

Px/Py <2

[MI]

Px/Py =2

[duck]

Good Attempt.. :)
Correct answer: px/py ≤ 2

[Abhyudaya]

Hi...m a graduate frm Hansraj...will take dse dis year...cud u help me explaining dis answer
...

[Akshay Jain]

[Abhyudaya]

Thanks Akshay...could u just tell me any method to find competitive equilibrium
in gen. equilibrium....m alwys stuck wen prices r given...i have no prblm in finding
pareto O. points but get stuck wen asked to find competitve equilibrium...Just
tellling me the method would do...thanks again for ur post.