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Assume a consumer spends all his income in the purchase of two goods X and Y whose prices are Sh. 30 and Sh. 20 per...

      

Assume a consumer spends all his income in the purchase of two goods X and Y whose prices are Sh. 30 and Sh. 20 per unit respectively. The consumer‟s monthly income is Sh. 12,000. He is satisfied with various combinations of X and Y but prefers to spend his income in equal proportions on the two commodities, that is, at a ratio of 1:1 to maintain his level of satisfaction.
Using clearly labeled diagram; Show the relevant budget line and indifference curves indicating the equilibrium position of
the consumer.

  

Answers


Wilfred
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Wilfykil answered the question on February 7, 2019 at 09:52


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