Answer to Question #87892 in Microeconomics for ASUTOSH BEHERA

Question

Your budget is such that if you spend your entire income on 2 goods x and y.. You can afford either 4 units of x and6 units of y or 12 units of x and 2 units of y.if you spent all your income on x, how many units of x you could buy?

Answer 1

If you can afford either 4 units of x and 6 units of y or 12 units of x and 2 units of y, then:

4x + 6y = 12x + 2y,

8x = 4y,

y = 2x.

If you spent all your income on x, then 12x + 2*2x = 16x, so 16 units of x you could buy.