Peter spends all of his income on X and Y. Given that when price of X is 3 and the price of Y is 5, Peter will buy 18 units of X and 4 units of Y. We refer it as Burden A. Meanwhile, there is another bundle called Burden B. In Burden B, there are 10 units of X and 10 units of Y. So, it is believed that there is not enough information to tell whether Peter prefers A or B. Do you agree with this statement? Why?

Peter spends all of his income on X and Y. Given that when price of X is 3 and the price of Y is 5, Peter will buy 18 units of X and 4 units of Y. We refer it as Burden A. Meanwhile, there is another bundle called Burden B. In Burden B, there are 10 units of X and 10 units of Y. So, it is believed that there is not enough information to tell whether Peter prefers A or B. Do you agree with this statement? Why?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter3: Preferences And Utility

Section: Chapter Questions

Problem 3.9P

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