CONSUMER BEHAVIOUR 2 - ASSIGNMENT

Q1)

X 0 50 5
y 100 0 40

!"
(a) Slope = !#
= -10/ 5 = -2

(b)
X 0 5 10 15 20 25 30 35 40 45
y 100 90 80 70 60 50 40 30 20 10

(c)The new slope is one as price of both commodities would become equal as the price of
coconut is now half
(d) After change in price of coconut the new intercepts would be (0,100) and (100,0)

(e) The new slope would remain unchanged as price will remain constant
x 0 5 10 15 20 25
y 25 20 15 10 5 0

Rahul Batra
FY BSc Div B
PRN : 19060222137
 CONSUMER BEHAVIOUR 2 - ASSIGNMENT

Q2) a.Completeness

Q3)c.Transitivity

Q4)d.None

Q5)

Monthly Income of Connie = $200

(a) Cost per pound meat = $4
(b) Cost per pound potatoes = $2

Rahul Batra
FY BSc Div B
PRN : 19060222137
 CONSUMER BEHAVIOUR 2 - ASSIGNMENT

b) U(M,P) = 2M + P
Since potato are priced lower and both the commodities are perfect substitutes, this implies
that the consumption of either of the commodities gives equal satisfaction. Since the price of
potatoes is lower we can spend all of our income on potatoes to give us points (0,100).

Q6)d.All
Q7)c.Family of Indifference Curve is called Indifference Map
Q8)c.Both

Rahul Batra
FY BSc Div B
PRN : 19060222137