JNU DOUBTS!!!!

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JNU DOUBTS!!!!

SoniaKapoor
Q1 Sam chooses to spend entire income on food and buys no clothing.His indiffernce curves are
a vertical
b horizontal
c have a MRS greater than price ratio where his budget line intersects the food axis
d have a MRS less than price ratio where his budget line intersects the food axis

Q2 A utllity maximising consumer will do which of the following:
a derive same marginal  utility fr the last unit purchased of each good
b derive same marginal utility fr the last ruppee spent on each good
c derive same utility fr each good
d derive same average utility fr each good

Q3 Suppose a consumer's preferances are given by the utility function U=4rootx+y.Suppose consumer's original equilibrium was x=9,y=10.If the consumption of x reduces to 4,how many units of y must he consume to remain on same indiffernce curve
a 10
b 8
c 14
d 5
MA Economics
DSE
2014-16
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Re: JNU DOUBTS!!!!

Arushi :))
2.
At equilibrium
MU1/P1 = MU2/P2=.............MUn/Pn
So it should be 'b'

3. At (9,10)
U = 4*3+ 10 = 22
So to be on the same IC , the individuals utility should be 22
22 = 4*2 + y
y= 22 - 8 = 14
So c
1.
For the first one,
i am confused between c and d.
Its surely not a and b , because its nowhere mentioned that one of the goods is neutral.
But it can be both c or d depending on which axis you are taking food :((
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Re: JNU DOUBTS!!!!

SoniaKapoor
In reply to this post by SoniaKapoor
Thankuuu Arushi :)
MA Economics
DSE
2014-16