For Jones, X and Y are perfect substitutes, and he is always willing to substitute 6 units of X for 2 units of Y.  The price per unit of X is $5, and the price per unit of Y is $15.  Jones’s income is $60.  How many units of X does Jones consume? Suppose that the price of X increases to $10, and everything else remains the same. How many units of X does Jones consume? At which price does the demand curve of X become horizontally flat?

Algebra for College Students
10th Edition
ISBN:9781285195780
Author:Jerome E. Kaufmann, Karen L. Schwitters
Publisher:Jerome E. Kaufmann, Karen L. Schwitters
Chapter12: Algebra Of Matrices
Section12.CM: Cumulative Review Problem Set
Problem 115CM
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For Jones, X and Y are perfect substitutes, and he is always willing to substitute 6 units of X for 2 units of Y.  The price per unit of X is $5, and the price per unit of Y is $15.  Jones’s income is $60. 

  • How many units of X does Jones consume?
  • Suppose that the price of X increases to $10, and everything else remains the same. How many units of X does Jones consume?
  • At which price does the demand curve of X become horizontally flat?  
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