Question: 2- (Ipts) Consider that there are two goods, good X and good Y, which are perfect substitutes. The consumer has the utility function given by:

2- (Ipts) Consider that there are two goods, good X and good Y, which are perfect substitutes. The consumer has the utility function given by: not, 1') = not + Y The prices of the goods are given by px = 4 and p1, = 2. respectively. The income of the consumer is given by I = 60. a) Choose a value for parameter \"a\" by yourself. Graphically illustrate the budget line of the consumer and draw the indifference curves. Then, find the consumption bundle that maximizes the consumer's utility. b) List the possible outcomes for different values of parameter \"a\
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
