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प्रश्न
A consumer wants to consume two goods. The prices of the two goods are Rs 4 and Rs 5 respectively. The consumer’s income is Rs 20.
How much of good 1 can the consumer consume if he/she spends his/her entire income on that good?
उत्तर
If Rs 20 is entirely spent on good 1, then the amount of good 2 demanded will be zero i.e., x2 = 0 as the consumer has no income left to spend on good 2.
4x1 + 5 (0) = 20
4x1 = 20
`x_1 = 20/4`
`x_1 = 5`
Amount of good 1 consumed = 5 units
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