Question: 3) Suppose a consumer's budget is M = 60 , which she spends on buying two goods, X and Y. The consumer likes (i.e. prefers)

 3) Suppose a consumer's budget is M = 60 , which

3) Suppose a consumer's budget is M = 60 , which she spends on buying two goods, X and Y. The consumer likes (i.e. prefers) each unit of good X twice as much as each unit of good Y, regardless of how many units of X and Y she has. The prices of each unit of goods X and Y are denoted by px and piy , respectively. Explain your answers to the following questions with the help of a suitable diagram. (i) If p1 = 15 and p', =10 , what are the amounts of X and Y in the consumer's optimal bundle? (ii) Alternatively, if px =15 and py = 5 , what are the amounts of X and Y in the consumer's optimal bundle? [Note: The optimal bundle is dened as one that would maximize the consumer's utility given her budget constraint] (2.5 + 2.5 = 5 points)

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