Re: JNU ECOM 2011 QUES 91-100

Posted by jack on Mar 29, 2014; 8:08am
URL: http://discussion-forum.276.s1.nabble.com/JNU-ECOM-2011-QUES-91-100-tp7585657p7585675.html

Given: P(x)=2P(y), 6unit of x and 20 unit of y. We put these values in the budget line,                                            so, Px.X+Py.Y=M,                2P(y).6+P(y).20=M, solve this equation, we get P(y)=M/32 , second statement tell us that  income is double from situation1, now income is 2M. P(y) is twice the P(y) in situation1, so new P'(y)=2.(M/32), we get =M/16 and P(x) is same, so P(x)=2.(M/32), we get=M/16, now put in the new budget line  (M/16).X+(M/16).20=2M, solve this equation, we get X'=12