John has the utility function u minxy the price of x is 1, Ask an Expert

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John has the utility function U = Min{x,y}. The price of x is 1, the price of y is 1, and his income is 50. a) Find John’s optimal bundle. b) Suppose now there is a discount for the first 20 units of x John buys such that px=0.5 for those first 20 units. For additional units, John pays the regular price px=1. Draw the new budget constraint. c) Find the optimal bundle in the new situation described in b.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91559830

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