Re: DSE-2009

Posted by Bhaskar Biswas on Jun 13, 2010; 6:09pm
URL: http://discussion-forum.276.s1.nabble.com/DSE-2009-tp5138086p5174902.html

for the 2nd part of the question, ie q no 27, when he have the full amount of Rs. 1000 to spend as he wishes, the simple way to calculate is by equating the MRS to the Price ratio.

This gives the Books(x)=4, and movies(y)=80, but as the offer gives him 1 movie for each of the book he buys, hence, the total number of movies(y)=84...hence option number (b)..according to me...

now coming to Question number 26, his rational behaviour will not allow him to buy books more than 4, but, given the book grant, he will have to buy 5 books, which is more than sufficient for him. So, this leads him to no other choice and he spends the remaining Rs. 750 on movies.

Hence the consumption bundle is books(x)=5, movies(y)=75..hence option number (b)..according to me...