Discussion Problem_(26)

[duck]

Q1) Suppose, Utility of a consumer is given by:
U(x,y) = y+log(x)
Price of x = 1, Price of y=10 and Income = 5.
Find the optimal consumption bundle.

[Mauli]

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[rohan]

(5,0)

[laracroft]

(5,0) because its a quasi-linear utility function. and all income will be spent on good X ( since income is insufficient to buy good Y)

[Sumit]

Optimal consumption bundle (5,0)...

[Mauli]

i went badly wrong in this.
i did y for x and x for y. and what not. thanks croft for gvng an explanation.

[laracroft]

Hi mauli
No problem !! :) :) :)
Ur welcome !!