Question: A consumer buys only two two goods, I, and 12. Initially, the prices are (P1, P2) = (12, 12) and the consumer chooses bundle ($1,

 A consumer buys only two two goods, I, and 12. Initially,

A consumer buys only two two goods, I, and 12. Initially, the prices are (P1, P2) = (12, 12) and the consumer chooses bundle ($1, 12) = (10, 10). Later, the prices change to (P1, P2) = (20, 10). At these prices the consumer chooses bundle ($1, X2) = (10,6). (a) Are these two choices consistent with utility maximization? Why? (b) Can you say whether the consumer was happier when prices were (P1, p2) = (12, 12) or when they were (P1, P2) = (20, 10)

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