Re: dse 2010

Posted by Ram on Mar 16, 2012; 6:53pm
URL: http://discussion-forum.276.s1.nabble.com/dse-2010-tp7379262p7379962.html

its option 4....if we read the question carefully it mentioned that consumer buys (xd,yd) and gets additional xd as free. here nothing is mentioned regarding prices so I assumed prices as constant as we all know that if price of one commodity decreases the quantity demanded of that commodity will increase(am assuming it as normal good). here consider that price of x is halved ( am just assuming ) the budget line will have same intercept on y-axis ( i.e. commodity y) and the intercept on x-axis will change that means x will get doubled. but here nothing has mentioned regarding prices we can say that (xd,yd) are same as (x,y) because they mentioned that consumer buys (xd,yd) and gets additional xd as free. if they mentioned there as consumer got (xd,yd) then it is option 2.... Correct me if am wrong or If I would have made it complicated :)