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.
What is the effect of an increase in the consumers income from Sh. 12,000 to sh. 24,000 per
month?

  

Answers


Wilfred
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Wilfykil answered the question on February 7, 2019 at 09:55


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