(Answered) Tre are two commodities h 12 with prices denoted by

Economics

There are two commodities, h = 1,2, with prices denoted by, p1,p2>0 and income denoted by m>0. The budget constraint is defined by the equation : p1x1 + p2x2 = m, where x1 is the quantity of good 1 and x2 is the quantity of good 2.

Assume the consumer prefers to consume equal amounts of good 1 and good 2 whenever possible. Calculate the preferred amounts x1 and x2 as functions of prices and wealth.

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