Suppose a consumer can afford to buy 6 units of Good-1 and 8 units of

1.	Suppose a consumer can afford to buy 6 units of Good-1 and 8 units of Good-2 if she spends her entire income. The prices of the two goods are Rs.6 and Rs.8 respectively. How much is the consumer's income?
Answer» Budget equation is given as : P_xX+P_yY=M Let Good-1 be X and Good-2 be Y Putting the values, we get : (6).(6) + (8).(8) = 36 + 64= Rs.100

Suppose a consumer can afford to buy 6 units of Good-1 and 8 units of Good-2 if she spends her entire income. The prices of the two goods are Rs.6 and Rs.8 respectively. How much is the consumer's income?

Answer»

Budget equation is given as :

P_xX+P_yY=M

Let Good-1 be X

and Good-2 be Y

Putting the values, we get :

(6).(6) + (8).(8) = 36 + 64= Rs.100