Question: Question 5 (10 Marks) A consumer has RM300 to spend on goods X and Y. The market prices of these two goods are Px =

Question 5 (10 Marks)

A consumer has RM300 to spend on goods X and Y. The market prices of these two goods are Px = RM=15 and Py = RM 5.

  1. What is the market rate of substitution between goods X and Y?
  2. Based on graph, illustrate the consumer's opportunity set.
  3. Illustrate the consumer's opportunity set for the case where income increases by $300.

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