Question: Consider a consumer whose utility function is: ?(?1,?2)=???(?1)+???(?2)U(x1,x2)=log(x1)+log(x2) Suppose that ?2=1,?=1p2=1,m=1, and ?1p1 is unknown. There is rationing such that ?1?0.7x1?0.7 ** Part a (10

Consider a consumer whose utility function is:

?(?1,?2)=???(?1)+???(?2)U(x1,x2)=log(x1)+log(x2)

Suppose that ?2=1,?=1p2=1,m=1, and ?1p1 is unknown.

There is rationing such that

?1?0.7x1?0.7

** Part a (10 marks)

Draw the budget set, taking the rationing into account.

** Part b. (10 marks)

Find the threshold ?1p1 such that the if

?1>??1,p1>p1?,then the consumer consumes ?1x1 strictly less than 0.70.7.

Consider a consumer whose utility function is:?(?1,?2)=???(?1)+???(?2)U(x1,x2)=log(x1)+log(x2)Suppose that ?2=1,?=1p2=1,m=1, and ?1p1 is

Consider a consumer whose utility function is: U(x1, x2) = 103061) + 103062) Suppose thatpz = 1, m = 1, and p1 is unknown. There is rationing such that ** Part a (10 marks) Draw the budget set, taking the rationing into account. ** Part b. (10 marks) Find the threshold p1 such that the if P1 > FL then the consumer consumes x1 strictly less than 0.7

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