Billy Madison consumes 100 units of X and 50 units of Y. The price of x rises from 2 to 3. The price of Y remains at 4. (a) how much must Billy’s income rise so that he can exactly afford 100 units of x and 50 units of y? (b) Draw Billy’s original budget set when the price of X is 2 and also Draw Billy’s budget set when the price of X is 3, but his income is unchanged (c) Draw Billy’s budget set when the price of X is 3 and his income increases by the amount in (a) so that he can afford his original consumption bundle.
Billy Madison consumes 100 units of X and 50 units of Y. The price of x rises from 2 to 3. The price of Y remains at 4. (a) how much must Billy’s income rise so that he can exactly afford 100 units of x and 50 units of y? (b) Draw Billy’s original budget set when the price of X is 2 and also Draw Billy’s budget set when the price of X is 3, but his income is unchanged (c) Draw Billy’s budget set when the price of X is 3 and his income increases by the amount in (a) so that he can afford his original consumption bundle.
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 23SQ
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Billy Madison consumes 100 units of X and 50 units of Y. The price of x rises from 2 to 3. The price of Y remains at 4.
(a) how much must Billy’s income rise so that he can exactly afford 100 units of x and 50 units of y?
(b) Draw Billy’s original budget set when the price of X is 2 and also Draw Billy’s budget set when the price of X is 3, but his income is unchanged
(c) Draw Billy’s budget set when the price of X is 3 and his income increases by the amount in (a) so that he can afford his original consumption bundle.
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