A consumer's consumption set (all things he wishes the consume) is given by: C = {x1,...

 

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A consumer's consumption set (all things he wishes the consume) is given by: C = {x1, x2}: x > a, x2 > b, a > 0, b > 0 Where x and x2 are goods that the consumer has in his utility function. What economic meaning do you give to the constants a and b in this consumption (half the points of the question)? Hint: Why is the consumer not okay with consuming zero of one and immense quantities of the other? The budget set (all things he can afford) is given by: B = {x1, x2}: P1x1 + 2x2 M Where p and p2 are respectively the prices of x and x2 and M is total income. Draw the area of the budget set that consumer could be willing to consume (the intersection of C and B) (half the points). You can also explain your answer. A consumer's consumption set (all things he wishes the consume) is given by: C = {x1, x2}: x > a, x2 > b, a > 0, b > 0 Where x and x2 are goods that the consumer has in his utility function. What economic meaning do you give to the constants a and b in this consumption (half the points of the question)? Hint: Why is the consumer not okay with consuming zero of one and immense quantities of the other? The budget set (all things he can afford) is given by: B = {x1, x2}: P1x1 + 2x2 M Where p and p2 are respectively the prices of x and x2 and M is total income. Draw the area of the budget set that consumer could be willing to consume (the intersection of C and B) (half the points). You can also explain your answer.