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

  1. Suppose a consumer's budget is = 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 byand, respectively. Explain your answers to the following questions with the help of suitable diagrams.

(i) If= 15and= 10, what are the amounts of X and Y in the consumer's optimal (i.e. utility-maximizing) bundle?

(ii) Alternatively, if= 15and= 5, what are the amounts of X and Y in the consumer'soptimal bundle?

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