A consumer's preferences over quantities of goods x1,x2 z20 are represented by the utility functionu(x1, 22) = min{2·x1, 22}It has initial endowment w-(3,8). The price of good 1 is given by p1>0 and the price of good 2 is given byp2=3.Note: For the optimal decision is3(P +8)21 (P1, P2, m) =Pi +6Which of the following statements is correct?a.The consumer's net demand for good 1 is given by d1(p1)=88+p1.b.The consumer's net supply of good 1 is given by s1(p1)=66+p1.CThe net demand of the consumer of good 1 decreases in pl1.d.The net supply of the consumer of good 1 increases in p1.

Utility Function : U = min {2x1 , x2 } Endowments : w = (3 , 8 ) Price of good (x2) = 3 Price of…

Answered: A consumer's preferences over…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.8P

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