Q1.a)b)c)d)e)f)h)There are two goods and John has initial endowment (x1, x2)(4, 6). Also assume p₁, P2 > 0. Which of the following are definitelytrue:=If prices are (p1, p2) = (2, 1) then John can afford the bundle (x1, x2)(6,5).If John can afford the bundle (x1, x2) = (6,5) then prices are (P1, P2)(2, 1).If prices are (p1, p2) = (2, 1) then John can afford the bundle (x1, x2)(3,8).===If John can afford the bundle (x1, x2) = (3,8) then prices are (P₁, P2) =(2, 1).John can afford the bundle (x₁, x2) = (4,4).John can afford the bundle (1, 2) = (5,5).John can afford the bundle (x1, x2) = (6, 6).John cannot afford the bundle (x₁, x₂) = (5,5).

OPTION A and OPTION B are definitely incorrect because given an endowment bundle ( which is actually…

Q1. a) b) c) d) e) f) g) h) There are two goods and John has initial endowment (x1, x₂) (4, 6). Also assume p₁, P2 > 0. Which of the following are definitely true: = = If prices are (p1, p2) = (2, 1) then John can afford the bundle (x1, x2) = (6,5). If John can afford the bundle (x1, x2) = (6,5) then prices are (P₁, P2) (2, 1). = = If prices are (p₁, p2) = (2, 1) then John can afford the bundle (x1, x2) (3,8). = If John can afford the bundle (1, 2) = (3,8) then prices are (p₁, P2) = (2, 1). John can afford the bundle (x1, x2) = (4,4). John can afford the bundle (x1, x2) = (5,5). John can afford the bundle (x1, x2) = (6,6). John cannot afford the bundle (x1, x2) = (5,5).

Q1. a) b) c) d) e) f) g) h) There are two goods and John has initial endowment (x1, x₂) (4, 6). Also assume p₁, P2 > 0. Which of the following are definitely true: = = If prices are (p1, p2) = (2, 1) then John can afford the bundle (x1, x2) = (6,5). If John can afford the bundle (x1, x2) = (6,5) then prices are (P₁, P2) (2, 1). = = If prices are (p₁, p2) = (2, 1) then John can afford the bundle (x1, x2) (3,8). = If John can afford the bundle (1, 2) = (3,8) then prices are (p₁, P2) = (2, 1). John can afford the bundle (x1, x2) = (4,4). John can afford the bundle (x1, x2) = (5,5). John can afford the bundle (x1, x2) = (6,6). John cannot afford the bundle (x1, x2) = (5,5).

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter3: Preferences And Utility

Section: Chapter Questions

Problem 3.9P

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