Question: With a given P base x a consumer consumes an initial bundle (10,16), achieving a utility of 14. The corresponding budget line has a slope
With a given P base x a consumer consumes an initial bundle (10,16), achieving a utility of 14. The corresponding budget line has a slope -1. Halving P base x causes the budget slope to double and the consumption bundle to change to (25,5) achieving a utility of 30. What is the wealth effect of this shift on the consumption of good x?
There is a bundle (22,8) which achieves utility 14 while lying on indifference curve at a point that has a slope -1/2.
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