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when the price of X is 3 and the price of Y is 3,an individual consumes a bundle of x=4,Y=4.when the price of X has become 1 and the price of Y 5,the individual chooses a bundle of X=3,Y=5.therefore,the consumer prefers (3,5) over (4,4).true or false,explain..
I think the question may be wrong. where did you get the question?
Not comparable. Fail to hold total budget and the consumption of other goods constant at the same time as (4,4) and (3,5) cost differently.
no dear.i think we have to 1st find the income by its formula and then have to make graph,,
then we can make budget line
|dw:1365401341275:dw| According to the given 2 conditions, we can draw 1 consumption curve and 1 indifference curve tangent to it at the point (4,4). We can also draw 1 consumption curve and 1 indifference curve to it at the piont (3,5). When I was trying to draw the last indifference curve I found the 2 indifference curve must cross with each other to complete the gragh. But you know indifference curves never cross. So the given conditions are wrong.
acc to me utility is more in 3,5 so consumers prefers it