Tutorial 5 Solution

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Quantity of y

I Px x Py y
I Px
y x
Py Py

Quantity of x
Quantity of y

Increasing Utility

y1 A

U3
U2
y2 B
U1
Quantity of
x1 x2
Quantity of y

DMRS

+1 unit

+1 unit U1
Quantity of x
Quantity of
y I' B
Py

E
y* A
C

U3
D
U2
U1
I' Quantity of
x*
Px
Quantity of y
I'
Py

y* A

U1

I' Quantity of x
x*
Px

I.name/53t30.2=105Budget1ine:105:=3.5Nt1.75y
Whln X 15 30 175 ㄨ 3 0 = 1 05
y 3 5 ㄨ 15 ⼗
= =
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