Re: DSE 2004,2005

Posted by Suneja on Oct 19, 2012; 11:53am
URL: http://discussion-forum.276.s1.nabble.com/DSE-2004-2005-tp5186467p7579585.html

@dUCK
L+3(x-8)/2 = 16

put x=L (as utlity is min demand function)
u will get x=L= 11.2

This is the case for x>8
why dont we take the case wen x<=8
then budget constrain will be L+x=24   (do we assume prices to be unity for both the goods here?)
putting L=x, we get L=x=12 wic is more than 11.2
so why not choose this