Q 43 and 23 DSE 2011

[Sanjana]

Q.43 m=100.Assume non satiation.Price of B fixed at 20.when Price of A=10 3 units of B are bought.when Price of A=20 5 units of A are bought.From this we can conclude for the relevant price range
a)A is inferior
b)B is a complement to A
c)A is Giffen
d)All of the above



Q23.closest point on the parabola y=1/4x^2 from a given point (0,b) on the vertical axis with b>0,is the origin if and only if
a)b<3
b)b>3
c)b<2
d)b>2

can sb help out with these ques.? I need explanations.

[s]

Q.43

M=P_A*A+P_B*B...(1)

when P_A=10, B=3, and solve 1 to get A=4

when P_A=20, A=5 solve 1 to get B=0

thus as P_A rises demand for A rises which is a characteristic of a giffen good and giffen => inferior good
also B will be a complement of A when D(demand for B)/D(P_A) <0 which holds here ..so (D)

[CR7]

Why B is a complement of A? Plz explain more clearly.