Question: There are two commodities: x and y. Let the consumer's consumption set be R2+and his preference relation on his consumption set be represented by u(x,y)

There are two commodities: x and y. Let the consumer's consumption set be R2+and his preference relation on his consumption set be represented by u(x,y) =x+ 2y. When his income is equal to 1 and the prices of good x,px= 2 and of good y, py= 1,

1. Solve the utility maximization problem.

2. Does the solution calculated here obey the "equal bang for buck" condition? Explain.

Now assume that the preference relation on his consumption set be represented by u(x,y) =x+y. When his income is equal to 1 and the prices of good x,px= 2 and of good y, py= 1.

1. Solve the utility maximization problem.

2. Does the solution calculated here obey the "equal bang for buck" condition? Explain.

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